GM Rejects Claim That Executive Greed Scuppered Renault Alliance
Fortune Senior Editor Alex Taylor snagged GM’s attention with an editorial posted at CNN Money, in which he posthumously advocates for the General’s failed 2006 alliance with Renault/Nissan. “According to recent interviews with parties involved in the discussions, as well as a confidential analysis prepared for the deal that was obtained by Fortune,” Taylor writes. “The tie-up could have produced as much as $10 billion in operating earnings per year for GM by 2011.” So, why did GM just say no? Because its executives were making enough already, thank you. “One proposed strategy called for a ‘repopulation’ of GM’s executive ranks with outside talent. That presumably would have forced some incumbent managers out of their jobs – a shocking development at a company where executives seem to enjoy lifetime employment regardless of their performance.” The General’s Spinmeister General penned a mealy-mouthed response to Taylor’s “woulda, coulda, shoulda” analysis. Steve Harris compared Taylor’s dietribe to speculating “if Time-Warner, your magazine’s parent company, had not done the AOL deal.” Oh snap. So what are Harris’s points of substance? The Renault/Nissan merger plans “could have effectively foreclosed (GM) from entering alliances with other automakers.” And “benefits from the potential joint projects were highly skewed to Renault-Nissan.” None of which sounds bad enough to turn down up to $10b in annual revenue. But, says Harris, “today General Motors is focused on the future, not the past.” Like… a federal bailout.
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