Ghosn: General Motors should have joined team in 2006

David Shepardson / Detroit News Washington Bureau

New York -- Carlos Ghosn, CEO of the Renault-Nissan alliance, said General Motors would have been far better off if it had formed a transcontinental alliance with the French-Japanese auto partnership in 2006.

"Without any doubt," he told a forum sponsored by the Council on Foreign Relations. GM and the alliance called off talks in October 2006. "We knew fundamentally that this would work, but only if it was a collaborative effort."

Ghosn reiterated that "frankly, there was a possibility to create something that would be extremely competitive" and allow the companies to share technology, best practices and a common approach. "Unfortunately, it did not happen."

Ghosn was asked if he was happy that Renault-Nissan had not formed an alliance with GM. "When you see the disaster and the waste of energy and skills and talent, nobody can be happy," Ghosn said.

The global auto industry will continue to see fewer players, Ghosn said, but in more innovative ways that keeps brand identities.

"I think the industry is going to continue to consolidate," Ghosn said. "There's no way I think you're going to continue with the same number of players in the car industry."

Ghosn said the auto industry has become much more interconnected. "When General Motors was in danger, everybody was scared. We were scared. Because some of our suppliers are big suppliers of General Motors," Ghosn said. "If they go down, we would not have been able to assemble any single car in the United States."

Steve Rattner, the former Obama administration auto adviser, also spoke on the panel and said GM's management culture had "a lack of interest in change, the lack of interest in fresh ideas, the lack of interest in new people and that is the largest part of the reason that the bus went off the cliff."

GM spokesman Chris Preuss declined to comment on Ghosn's remarks.

GM ran out of money at the end of 2008 and was forced into bankruptcy in June, and was able to restructure only because of $50 billion in government loans.

Ghosn also talked at length about its plans for zero emission vehicles. Nissan plans to start selling its all-electric Leaf by the end of next year, taking on GM's extended range Chevrolet Volt that can run on battery power and gasoline.

Ghosn noted that in India and China, there are about 50 cars per 1000 people, compared with 600 vehicles per 1,000 people in Europe, and 800 vehicles per 1,000 people in the United States.

With growing demand in developing countries, Ghosn said it's critical to embrace zero emission vehicles.

Ghosn noted that Congress has approved a $7,500 tax break for zero emission vehicles, while the European Union has a 5,000 euro tax incentive and Japan has a 700,000 yen deduction.

Ghosn said California officials told him last week that the state is considering adding state tax breaks to steer more electric vehicles to the Golden State. Nissan is kicking off a 20-city tour of its electric vehicle in California. While Nissan won't have a formal display at the North American International Auto show in Detroit for the second straight year, it will show off the Leaf as part of an electric vehicle display. Ghosn said he expected to sell 100,000 Leaf vehicles annually by 2011 or 2012 globally.

Ghosn estimated by 2020, 10 percent of all vehicles sold worldwide will be electric vehicles. "We're not going to take the world by storm," Ghosn said. He said 25,000 people in the United States have already signed up on a Nissan Web site expressing interest in purchasing a Leaf.

dshepardson@detnews.com (202) 662-8735