Sales Fall, and GM May Join Nissan, Renault

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Another batch of bad news for the big three U.S. automakers - sales slumped again in June. At General Motors, U.S. vehicle sales fell nearly 26 percent from a year ago, when the company was offering generous incentives to customers. The results come as GM's largest individual stockholder is pressuring the automaker to consider a major alliance with Nissan and Renault. Those automakers say they'll consider the idea. GM is more tightlipped.

NPR's Jack Speer has more.

JACK SPEER reporting:

At a conference call today to discuss the latest monthly sales figures, a GM official made no mention of the dramatic proposal that's rippled through the auto industry. Late last week, billionaire investor Kirk Kerkorian began pushing the idea of an alliance that would give the two foreign automakers a sizeable minority stake in the world's largest car company. David Healy is an auto industry analyst with Burnham Securities. He thinks there's simply too much baggage to make it work.

Mr. DAVID HEALY (Burnham Securities): Nissan has been helping destroy General Motors's market share by its low cost and high quality products and, you know, they're bitter enemies.

SPEER: And beyond their status as rivals, there's also the mixed track records such tie-ups have had in the past. Seven years after the marriage of German automaker Daimler and Chrysler, the combined company is still searching for those promised synergies. GM's own alliance with Italian automaker Fiat also recently fizzled, costing GM $2 billion. But for GM, desperate to stem large losses, there could be benefits. Brock Yates is an automotive writer.

Mr. BROCK YATES (Car and Driver magazine): The entities seem to be highly optimistic about it and, of course, General Motors at this point is struggling. And they may feel very strongly that by an alliance, certainly with a very strong Nissan, that it could be very helpful to them.

SPEER: And there is the Chairman and CEO of Nissan, Carlos Ghosn, an individual who may be the closest thing the auto industry has to a rock star. Ghosn is credited with saving Nissan from collapse when he took over the company in 1999, but some industry watchers doubt whether GM's board is ready to send a signal that it's giving up on current management, something it would almost certainly be doing by moving quickly on the alliance idea. Gerald Meyers is a professor at the University of Michigan and the former head of American Motors.

Mr. GERALD MEYERS (University of Michigan): I think it's not likely to happen. I think the GM board, realizing the plight that the company is in now and the sensitivity of its current circumstances, will say thanks, but no thanks. Drop in next year and we'll see how things look.

SPEER: Since last week, GM stock is up sharply on speculation about the possible alliance.

Jack Speer, NPR News.

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