Auto supply chain in jeopardy from Nissan-Renault-GM link

Filed in archive Partnerships on July 7, 2006

I read this wonderful piece in Manufacturer about new alliance in the automotive sector. The piece is based on a news release in Financial Times and I have provided it below without any changes:

Speculation about a global automotive alliance that would shake up the sectors supply chains as never before continued today.

Weekend rumours that the giant Renault and Nissan alliance was ready to invite the troubled world number one car maker GM to its party gathered substance. Reports by The Financial Times today (Wednesday)said that Renault/Nissan Chief Executive Carlos Ghosn was arranging to meet his opposite number at GM, Rick Wagoner later this month in Detroit.

The FT says that Fritz Henderson, GM's chief financial officer, is examining the Renault/Nissan alliance to see what benefits there might be for GM if it joined.

If such an alliance were to come to be, it would, as the world's largest car group, have far-reaching effects on parts and component purchasing up and down the world-wide automotive supply chain, leveraging power that would inevitably put supplier margins under further pressure taking some to the brink of insolvency in the face of already intense competition from suppliers in low wage economies.