GM to Proceed With Partnership Talks

General Motors (GM) said Friday that its board endorsed a plan to explore a partnership with two foreign-based competitors, opening the door for a landmark deal with Japanese automaker Nissan and its European partner, Renault.

The board made the decision in response to a public request from Kirk Kerkorian's Tracinda Corp., one of GM's larger shareholders that gained representation on the board this year after criticizing the automaker's approach to rejuvenating its business. The boards of Renault and Nissan voted earlier this week to explore a partnership.

Such a deal could mark a dramatic shift in the competitive landscape of the global auto industry. Besides potentially helping an ailing GM, it could challenge the increasing dominance of Toyota(TM), which is poised to surpass GM as the world's largest automaker in the years ahead.

The partnership also could be viewed as a pockmark on the record of Richard Wagoner, GM's chairman and chief executive. The Wall Street Journal reported earlier this week that he was opposed to a deal, but Friday's statement from the company marked an apparent reversal in his position.

"[GM] has a lot of experience with different types of alliances, and some have provided significant benefits to GM's competitive position and financial strength," said Wagoner. "We will enter into discussions with the managements of Renault and Nissan with an open mind -- eager to hear their ideas of how an alliance between our companies might work to our mutual benefit. Given the complexity of any potential relationship, it has to be carefully considered on its merits before coming to any conclusion. We are committed to an objective and thorough review of that potential."

GM also said that when the possibility of an alliance was first raised, Wagoner promptly contacted Carlos Ghosn, the chief executive of Renault, and they "agreed to meet at a mutually convenient time to have an initial exploratory discussion."

"We periodically receive interesting proposals and we owe it to the company and its shareholders to explore how they might work, and to objectively weigh the potential benefits and issues that each might present," Wagoner said. "That is exactly what we recommended to the GM board in this specific case, and exactly what it has agreed we should do."

Shares of GM were recently up 59 cents, or 2%, to $29.80.

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