Behind the Wheel with Phil Lebeau

Ghosn's Done Looking For A Dance Partner


The news from Renault Nissan CEO Carlos Ghosn out of Eastern Europe today -- that his company is no longer seeking a third auto company for an alliance -- should send a clear message: automakers are not yet ready to consolidate.

Remember last summer, when the GM and Renault Nissan alliance was first proposed by billionaire investor Kirk Kerkorian?  Shortly after that, there were reports of Toyota, Ford, DaimlerChrysler and others discussing possible alliances if GM CEO Rick Wagoner and Carlos Ghosn struck a deal. And in fact, there were back room talks among many of the automakers, seeing if there were "logical fits." But once the Renault/Nissan/GM deal died, so did the consolidation talk.

Today's report from Automotive News, that Ghosn no longer believes there is a need for a third automaker to join his companies, confirms what many first suspected last summer.  There may be too many plants, with the capacity to build more cars and trucks, but the boards running the big automakers are not ready to deal. Partially because any deal right now would require one of the big firms to sell out -- and perhaps not at as high a premium as many believe.

The fact is, the global auto industry needs a downturn, with automakers in serious pain, before they will be ready to seriously think about hooking up. And with global auto sales growth trending higher --thanks to China, India, and Eastern Europe -- the car company leaders are all reaching the same conclusion: there's no need to sell out right now.

Questions?  Comments?