To make sense of the proposal for General Motors to join the Renault-Nissan alliance, you must understand Kirk Kerkorian.
He's an agitator. He is trying to prod CEO Rick Wagoner to boost GM's stock price. He is using his 9.9 percent stake to poke Wagoner in the rib cage. Get results or we'll bring in Carlos Ghosn.
Fine. Shareholders should act. American capitalism needs more provocateurs like Kerkorian.
But would a GM alliance with Renault and Nissan help the GM elephant dance? Not a chance. In fact, a Renault-Nissan-GM alliance would be a monstrosity, a cumbersome exercise that would simply distract GM's leaders.
Look no further than GM's recent history to see why.
GM's alliance with Fuji Heavy Industries Ltd. (Subaru) foundered last year. The aim when the deal was struck in 1999 was to cut costs by co-developing autos. But Subaru's quirky boxer engines were incompatible with GM's standard engines, making co-developing difficult and expensive. Last year GM unceremoniously sold its sake in Fuji.
Earlier, GM tried to make its alliance with Isuzu Motors Ltd. work. But despite a very successful diesel engine for GM trucks, the Duramax, the alliance eventually failed. GM lost faith in Isuzu's engineers.
GM's alliance with Fiat also flopped, costing Wagoner $2 billion to extract GM.
Recent auto history is littered with other troublesome alliances and acquisitions: BMW and Rover, Daimler-Benz and Chrysler, and Ford and Jaguar, to name a few.
Why do so many marriages fail to reach their potential? Tribalism is the main culprit. Auto executives and engineers are naturally proud of their products and methods. The order to plan products with another tribe raises blood pressures and suspicions on both sides.
Of course, there are exceptions. Ghosn prodded Nissan and Renault executives to work together. But the odds are heavily stacked against a successful marriage.
GM's true task is to develop a vibrant consumer-oriented culture that can develop hot products. Another parts-sharing and cost-cutting exercise would be a waste of time.
You may e-mail Charles Child at [email protected]