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.
07/11, 6:44 PM
posted by:
Jim in LA
“Our minds are completely open,”
if by “open” you mean “completely blank,” then yes, i absolutely agree with wagoner.
god, he may be the worst example of promotion-through-in-boy-network this generation has to offer. worse than ebbers, lay and even winnick.
07/11, 7:08 PM
posted by:
Al in Chicago
Why Jim ? You state a rather blatant opion but back it up with little or no fact. What do you want him to say ? “Oh yeah, I’d love to sell GM to Nissan-Renault and just retire like Bob Eaton did.” What do you want from the guy ?? GM is building very competitive, world class products. GM basher’s don’t like to recognize this at all. L.A. is a fantasy land, I wouldn’t expect anyone from California to have a clue as to what is happening at GM right now, you just wouldn’t get it.
07/11, 8:00 PM
posted by:
Jim in LA
Al – it’s very clear. GM has suffered greatly, GREATLY under rick wagoner’s stewardship. i’d rather see Roger Smith at the helm than this guy. he’s a peter principle promotion, to me – but, of course, it’s just my opinion.
i’m a GM and american car fan, so don’t take this the wrong way – i want GM to remain INDEPENDENT and feel this whole kerkorian-inspired boondoggle is about nothing more than filling kirk’s pockets with cash while he destroys yet another company. did you take my comment to mean something else? please be advised that’s exactly what i meant, and mean.
our national corporate culture right now suffers from too many nepotistically placed people at the top of important companies, and not enough foresighted leadership by the boards of directors. kind of like how our country is – just trust the leader and all will be taken care of. except it’s not. things are a mess nationally, and GM is a microcosm of that.
thanks for the nice “LA is a fantasyland” comment. (it may be many things, but fantasyland it’s not; that’s in anaheim.) as for not having a clue as to what is happening at GM, i have numerous close acquaintances who work as execs at DC and GM (no one at ford, though). i try to stay up to speed as to what’s happening, as these companies are very important to me personally and to us as americans.
yes, i know GM is building many fantastic products. also, a lot of dog****. they’re just emerging from a bad trough – i expect gains to continue. but wagoner has precious little to do with this – it’s all about the program managers and their teams that are making it happen (or not) – and certainly not Rick Wagoner.
and i’ll say it one more time, for effect: this is ALL ABOUT KERKORIAN, nothing more. yet another mega-merger that results in a few oligarchs lining their pockets while 10s of 1000s get laid off – no thanks.
we as a country and populace should be smarter than that by now.
07/11, 8:07 PM
posted by:
Jane in LA
Get Mark Fields Hair in to run GM
07/12, 2:12 AM
posted by:
Jon'O
Al in Chicago complains of Jim in LA,“You state a rather blatant opinion but back it up with little or no fact.â€? Al then concludes his entry with, “…you just wouldn’t get it.â€? Rather hypocritical Al.
07/12, 3:13 AM
posted by:
Fatstrat
GM is on the right track in so many ways but the ledger has yet to catch up. I think that may be a reason why others are interested. I don’t think Nissan would want to jump in if they though GM was really going in the tank. If that was the case they would be better off picking up GM holdings for pennies on the dollar if they had to start liquidating them.
On the other hand, I agree, GM could do so much better, they are underachieving to new levels under the current leadership.
But, Cadillac is just blowing up with great rides, the Corvette has never been better and is now real comp for Euro makes…
The big gripe for most of the wacky GM bashers here is just because they think every car should be a BMW.
The Buick Lucerne is a perfectly competent car for point A to point B people on a budget as is the Cobalt.
GM can and I believe will be great again. Selling off would be a mistake I think, and would be disappointing to many here in the US.
07/12, 7:02 AM
posted by:
Renton
GM can be as great as they want to be. They have always chosen the cheaper, higher profit margin route.
Say what you want my ears are deaf to you.
07/12, 8:17 AM
posted by:
ss
“They have always chosen the cheaper, higher profit margin route.” BINGO!
07/12, 9:20 AM
posted by:
GMrules
GM has always been about building the best products on the market. Just some of you don’t realize it.
Bingo!
The resurgence has begun and GM will wipe the competition off the map and soon out of business. Cna’t wait. Rick you’re doing fine, don’t let some japcrap brand ride drag you or the success of General Motors down. Dump’em. They don’t belong in America
07/12, 10:39 AM
posted by:
Jim in LA
The big gripe for most of the wacky GM bashers here is just because they think every car should be a BMW.
absolutely true. america needs buick sedans. take a trip to nebraska and see what 50 year olds there buy. it is certainly not BMW.
that said, many of the low-end products do not match up well with their japanese counterparts – i strongly believe GM can dominate this category, if they choose. it’s all about leadership.
07/12, 10:58 AM
posted by:
ss
“Our minds are completely open” Translations- if the price is right we will do it
07/12, 11:49 AM
posted by:
ss
“Our minds are completely open”…because our pockets are empty and our new ideas are rooted in what’s popular at Barrett-Jackson auctions.
j i m
07/12, 12:42 PM
posted by:
Anonymous
Don’t worry guys. Nanjing Automotive will help once it takes over GM
Heck, they’re going to start setting up shop here anyway.
07/12, 1:26 PM
posted by:
bingethinker
The way I heard it, Nissan wants to use GM’s mothballed car plants to produce their own cars. Way cheaper than having to build new factories. That will help GM’s bottom line, but it won’t improve their product, unless they’re going to badge engineer the Altima and sell it as a Malibu.
07/12, 2:26 PM
posted by:
penyiar
GM’s current state reminds me of the mid-80s to mid-90s when the consumers (meaning: us!) waited in vain for GM (or any US manufacturer) to come up with a decent domestic product.
With the news of GM’s planned alliance and their boring product line-up, nothing can surprise me anymore. At least this news shows that they know they need help.
07/14, 10:00 AM
posted by:
Lorraine Hudson
To Whom It May Concern:
I have had a Chrysler 300 Touring for 2 years this September 2006. Each time I had maintenance service on the vehicle, I had to take leave off on my job because of the hours of operations for this department. I haven’t been able to get an alignment from Chrysler, because of the rims on my car in which Chrysler ordered for me during time of purchase. And I was informed the company in which put the rims on my give me the alignment. I’ve had 2 tires to go bad within the warrantly period of 48 months, and was informed there was no warranty on this particular brand of tires. Which is not what Chrysler told me at the time of purchase. Since I’ve had this car, I can truely say, Chrysler does not live up to customer satification. I have given Chrysler feedback on each survey after servicing my car, and none of this information was taken seriously, because the same things keep occuring.
Unsatified customer