General Motors CEO Rick Wagoner today told CNBC in an exclusive interview this evening that he is not personally opposed to an alliance with Renault and Nissan . Mr. Wagoner appeared on Kudlow and Company, and was grilled by hosts Larry Kudlow and Phil LeBeau on a number of issues. In response to rumors that he was leading the opposition to the alliance, Wagoner said that “Nothing could be farther from the truth.” He did go on to say, “Our minds are completely open,” and the proposal needed to be analyzed before any conclusions could be made.
No specific proposal, yet
He repeatedly stressed that speculation about the GM-Renault- Nissan tie-up was premature, because details of proposal have not even been given to the Detroit-based automaker yet. Wagoner was asked specifically by Kudlow if there’s any logic in selling 20 percent of GM for just $3 billion.
“What exactly do you get? What are the potential benefits for General Motors except of course for the privilege of working with the non-capitalist French government,” Kudlow asked. “There has to be a better benefit than that!”
Wagoner replied that Renault had not made any such offer. “We haven’t gotten a specific proposal yet,” said Wagoner. He stressed no offers had be made in terms of an acquisition of shares.
Wagoner said the value of any deal will depend on what powertrains, components, and whole products the three automakers could share. He said it will be a “straightforward exercise” to figure out the value in the deal, once both companies sit down for talks.
UAW, health care woes
Kudlow asked Wagoner about the current state of affairs with the United Auto Workers union, and how GM can remain completive when there are “more health care costs than steel” in the cars it builds.
Wagoner stressed GM is making good progress with the UAW, and praised the union’s leaders for their willingness to compromise.
Kudlow went on to ask Wagoner if GM would consider taking the same drastic measures Caterpillar Corporation used to free itself from union costs. The company famously scrapped its union affiliation, took a strike, and began hiring replacement non-union workers. It later returned to profitability, with much credit given to the move.
Mr. Wagoner would not acknowledge that such an option was even on the table at GM, and he noted that GM still has a year left in its contracts with the UAW. He said he hopes all the issues with the union will be resolved by then.
He said it would be “simplistic” to assume the strategy used by Caterpillar would work for GM. He said it doesn’t make sense to be “giving out a war cry” and heading into a strike at this time. He said if the current strategy fails, then other options will be considered.
Regarding any possible deal that could avert a UAW strike at Delphi, Wagoner said, “I’d be misleading you if I said I felt something was imminent.”
Good progress
Wagoner made it clear he thinks GM is making good progress with its turnaround effort.
GM is “finally beginning to get some decent traction,” Wagoner explain, “Anyone who says we’re not moving fast enough just simply isn’t looking at the facts.”
He said “even the toughest skeptics” must admit GM is moving in the right direction. “I’m not familiar with any other instance in history where a company in the span of twelve or fourteen months has whacked out over 8 billion dollars in their structural costs,” said.
Wagoner said major shareholders Kirk Kerkorian and Jerome York have also been satisfied with the pace of progress. If they want him out as CEO, “they haven’t told me that,” he said.
CAFE standards a “failed policy”
When asked about whether Washington’s CAFE standards are a problem to GM, Wagoner said, “we can meet the standards that are there.” However, he said he believes the standards do little to reduce America’s reliance on foreign oil. He said the focus should be on true alternatives, not “fooling ourselves with CAFE standards.” He said CAFE regulations are a “failed policy” on the part of American lawmakers.
