GM, Renault-Nissan alliance could focus on joint purchasing
By Dave Hannon -- Purchasing, 7/28/2006 1:44:00 PM
The alliance being considered by General Motors and Nissan and Renault may focus on a shared purchasing program, similar to the one currently in place between Nissan and Renault. According to a Bloomberg report this week, Carlos Ghosn, head of Nissan and Renault, said teams at the companies are studying the benefits of such an alliance in areas such as joint purchasing and will come up with number for potential savings. Nissan is 44% owned by Renault and the two have a joint procurement project under which 70% of their purchases are made jointly. The project has already cut about $868 million annually by combining $59 billion of purchasing, according to an estimate by Credit Suisse. Ghosn said expanding the project to include GM would not be a necessity, but it is worth studying. The deadline for considering the alliance is Oct. 15, according to industry sources.”
Renault and Nissan could stay prosperous by themselves for the short, medium and long term,” he said. Ghosn was emphatic that he is not pursuing any kind of management position at GM. “What I'm looking for are opportunities for Renault and Nissan, period,” Ghosn said. “I'm not going to get involved in the management of General Motors, period.”
But some market watchers say Ghosn should focus on his own companies, which have their own troubles. Renault’s first-half profits were down 36% and the company this week raised its forecast for the impact of raw material prices, saying they will reduce full-year results by $442 million in 2006, up from the previous forecast of $316 million. Renault was able to offset a $234 million rise in raw material costs in the first half by reducing purchasing costs by $237 million.
Now Playing:
GM and supplier tighten windows and costs
11/19/1998
