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The Honolulu Advertiser
Posted on: Wednesday, July 12, 2006

GM boss says he's open to alliance

By Tom Krisher
Associated Press

DETROIT — General Motors Corp. Chairman and Chief Executive Rick Wagoner said yesterday he is not against a proposed alliance with Renault and Nissan.

"Nothing could be further from the truth," he said in a live interview on CNBC.

In his first interview since billionaire shareholder Kirk Kerkorian proposed an alliance between GM, Renault SA of France and Nissan Motor Co. of Japan, Wagoner said his mind is open but there aren't enough details available yet to make a judgment.

"Our experiences with alliances — and we've had a lot of them over the years, as you know — really gets into what kind of products can you share, what kind of powertrains can you share, where are there opportunities to work together in distribution, so you really need to get into the details," he said from the lobby of GM's Detroit headquarters.

Wagoner also said he has excellent support from the GM board of directors and that anyone who doesn't think GM is moving fast enough on its turnaround plan is not looking at the facts. He said the company has cut more than $8 billion in structural costs over the past 12 to 14 months and is in the process of introducing many new products.

"I think this thing is coming around pretty quickly, to be honest," he said during the wide-ranging interview.

Wagoner faced heavy questioning about upcoming contract talks with the United Auto Workers union, saying he preferred negotiation to confrontation.

When asked if GM would use Caterpillar Inc.'s strategy to force a strike and hire replacement worker to reduce high healthcare and other labor costs, Wagoner said the company has been successful at the bargaining table so far and he's confident that further talks can bring more cost reductions.

"I think you've got to look at what's been accomplished over the last six, seven, eight months and give credit to the UAW leadership. They've been willing to sit down and work on these programs with us," Wagoner said.

Wagoner said he was aware that hiring replacement workers had helped Caterpillar cut costs, but he said that's not the only reason for the company's success.

"Caterpillar has run their business very well in a number of ways," he said.

He said GM's current contract with the UAW doesn't expire for more than a year, and during that time the company would work with the union to address issues that hinder the company's competitiveness.

About 35,000 hourly workers recently agreed to retire or take buyouts, which Wagoner said will cost the company money but also allow it to restructure its costs, including a reduction in the number of hourly workers in the "jobs bank," where laid-off workers get most of their pay and benefits even when they're not working.