GM & Renault

[HarleyEarl]

GM, Renault's mini alliance

Automakers weighing global tie-up already produce vans jointly

Bill Vlasic and Christine Tierney / The Detroit News

General Motors Corp.

The Movano, produced by GM and Renault's joint venture in Europe, is sold under GM's Opel brand. The nearly identical Master is sold with a Renault badge. See full image

Successful partnership

A joint venture between General Motors Corp., Renault SA, and later Nissan Motor Co., has been successful.

The venture builds 250,000 vans a year.

The companies have sold 1.2 million vans since 1999.

GM shares increase for 10th straight day

While the business world obsesses over a possible alliance of General Motors Corp. and Renault SA, the two auto giants are quietly launching their latest vehicle developed together in Europe.

There was zero fanfare -- and no sign of Rick Wagoner or Carlos Ghosn -- at media events this month for the new Opel Movano and Renault Master, nearly identical mid-sized commercial vans developed together by GM and Renault.

The vans are the product of a joint venture between GM and Renault dating back to 1999, when the Detroit automaker and its French counterpart began building light commercial vehicles together for the European market.

It's an obscure partnership among many in the global auto industry, but its success could offer a peek into the future of an historic international alliance between GM, Renault and the French carmaker's Japanese partner Nissan Motor Co.

And since Wagoner, GM's chairman, and Ghosn, CEO of Renault and Nissan, opened talks July 14 on a potentially huge deal to link their companies, the lessons learned from a small joint venture could have a big impact.

"That's really significant," said David Cole, director of the Center for Automotive Research in Ann Arbor. "To establish a relationship is one thing, but if you already have an existing relationship, things can go much easier."

GM and Renault-Nissan have said little about the agenda for the 90-day alliance talks. But if the commercial van business is any indication, the two sides may be more compatible than outsiders expect.

"We have a very professional relationship," said Jamal El-Hout, vice president of planning for GM Europe. "We work through tough issues very well."

Together, they produce 250,000 commercial vans a year at a GM plant in England, a Nissan factory in Spain and a Renault plant in France. About two-thirds of the output is mid-sized vans, and the rest is smaller models sold by GM as the Vivaro and by Renault as the Trafic.

"This is a cooperation that has been very positive for both partners," said a spokeswoman for Renault.

Culture of competition

Bland and boxy, the vans are a staple for small businesses across the Continent. About 2 million light commercial vehicles are sold in Europe each year, according to the European carmakers' association ACEA, and it's a brutally competitive market.

Partnerships are the norm in the segment. German automakers Volkswagen AG and DaimlerChrysler AG collaborate on commercial vans, as do Fiat SpA of Italy and the French manufacturer PSA Peugeot Citroen.

When GM and Renault began talks in the mid-1990s to produce vans in tandem, the fit seemed right from the start.

"One of the things that made it successful was that we needed each other," said Jon Dennis, one of the GM negotiators in the deal. "Everyone else was partnered except us."

Dennis, who now works for GM in Australia, said the tone was set at the top by Louis Schweitzer, Renault's then-CEO, and GM Europe's president at the time, Richard Donnelly.

"There was a lot of support from the leadership," Dennis said. "Schweitzer and Donnelly were motivated to make this happen."

The decision was made to form a 50-50 joint venture, with GM selling vans under its Opel and Vauxhall brands, and Renault marketing its vehicles separately.

Renault took the lead on engineering and design, while GM ran the manufacturing process. After Renault and Nissan formed their own corporate-wide alliance in 1999, the agreement was extended to all three companies.

Since 1999, the companies have built and sold more than 1.2 million vans -- and made money doing it.

"We've been successful with it and I believe it has been successful for the other companies," El-Hout said. "We've grown our commercial vehicle business 125 percent over the last five years."

Partnership still unclear

El-Hout declined to comment on the prospect for the far larger global alliance currently under discussion by high-level teams at GM, Renault and Nissan.

However, his experience in the van venture offers insight into possible areas of cooperation down the road. "This is a productive partnership because it makes sense to get the costs out together and to hook up on the (vehicle) platform," he said.

But sharing costs and production on a niche-market van doesn't change the intensely competitive relationship between GM's Opel brand and Renault across Europe.

"What we would like the product to be, we do that jointly," El-Hout said. "But we compete vigorously in the marketplace even though we are partners."

Speculation has been rife about the prospects of a GM-Renault-Nissan alliance since billionaire GM shareholder Kirk Kerkorian first advanced the idea publicly on June 30. The initial meeting between Wagoner and Ghosn two weeks later made headlines worldwide as the industry watched transfixed at a possible marriage of the No. 1 U.S. automaker and Renault-Nissan.

By contrast, the press previews for the new Movano van last week were hum-drum. Journalists were shown prototypes in Germany and given a chance to test drive the 2.8-metric-ton van.

But as the GM-Renault-Nissan talks heat up in the coming weeks, the trail blazed by the Movano and the Master could be a key indicator of things to come.

"We've seen all kinds of alliances -- good and bad -- in the industry," Cole said. "A healthy relationship like this is really the foundation of the successful ones."

[ocnblu]

Somehow I just cannot picture the Movano with a porthole window, Cragars, and airbrushed, topless Viking chicks. It just doesn't work in my mind's eye.

[HarleyEarl]

Somehow I just cannot picture the Movano with a porthole window, Cragars, and airbrushed, topless Viking chicks.  It just doesn't work in my mind's eye.

172949[/snapback]

I beg, I plead, someone do a chop of the Movano van with portholes, airbrushing, Cragars and topless Viking chicks.

[Robert Hall]

Somehow I just cannot picture the Movano with a porthole window, Cragars, and airbrushed, topless Viking chicks.  It just doesn't work in my mind's eye.

172949[/snapback]

Ummm..cause it's not 1976?

[Sixty8panther]

Hmmm... those vans look like pregnant gophers but they're

still better looking than the Mercedes (Freightliner / Dodge)

Sprinter with its 5-banger motor.

[Robert Hall]

I kind of like the style of the other Vauxhall/Opel van, the Vivaro..a sibling to the Renault Traffic and Nissan Primastar.

It would make an interesting Chevy van here..call it the Astro or Zytor or..

Edited August 2, 2006 by moltar

[Shantanu]

I think those are nice vans. If Mercedes is able to sell there's here (as a Dodge no less), than GM should bring their own van over. Especially since they recently killed one of their big vans.

In the age of high gas prices, they could sell decently.