Posted by: Gail Edmondson on October 4, 2006
The hottest auto story of summer sputtered out today, as GM and Renault-Nissan reportedly agreed to walk away from a global alliance. The no-go body language was already clear on the eve of the Paris Auto Show last week. General Motors Chief Executive Rick Wagoner and Renault CEO Carlos Ghosn were hardly raving about the tie-up which they’ve been debating for the past 10 weeks.
There were certainly many deal breakers, from Wagoner’s thinly-veiled disinterest to the disagreement over who would reap the greatest benefits. But the real challenge would have been getting an Asian, European and US automaker to deliver on the promised synergies. Ghosn knows better than anyone how hard it is to bridge cultural divides, such as the one between France’s Renault and Japan’s Nissan. Ghosn’s miracle turnaround at Nissan had everything to do with changing mindsets. To get Renault and Nissan working in cross-division teams back in 1999, he had to require all employees at each company learn English fluently — for starters. Many staffers also needed cultural training to communicate effectively with a Frenchman or a Japanese colleague.
During a round table last week with journalists at the Paris Auto Show, Ghosn said cultural issues were paramount in making such an alliance work. “The main cultural challenge is avoiding arrogance and accepting that someone else can bring you something,” said Ghosn. At the same time, Wagoner was boasting to TV journalists that GM didn’t need any help to survive. That may be true — but it doesn’t prove GM couldn’t benefit from a loose alliance. Now others may entertain the thought. It wouldn’t be surprising if Ford hadn’t already phoned Ghosn. The GM-Renault-Nissan chapter may be closed, but the story about global alliances — and how they work best — is just getting rolling.