A Ford alliance with Renault-Nissan?

Sam Eaton Oct 5, 2006
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A Ford alliance with Renault-Nissan?

Sam Eaton Oct 5, 2006
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TEXT OF STORY

SCOTT JAGOW: All this talk about an alliance between General Motors and two other carmakers isn’t even talk anymore. Yesterday, GM and Nissan-Renault broke off discussions about some kind of partnership. But what about Ford? Sam Eaton has more.


SAM EATON: Think of it as a corporate dating game.

With GM out of the picture Renault-Nissan is once again free to play the field in its quest to find an American mate.

Automotive News editorial director Peter Brown says Ford is likely to rise to the top of the list for one simple reason: It’s desperate.

PETER BROWN: They’ve got a cost problem, they’ve got a revenue problem, they’ve got a product problem and they need to attack them all very quickly because the competition’s only getting tougher. So Ford is very open to doing new things.

Neither automaker is commenting on the possibility of a hookup, but Brown says it could be a match made in heaven.

He says alliances allow companies to save significant costs by boosting their economies of scale.

About three quarters a car’s value comes from parts made by outside suppliers. Save money on those, Brown says, and you’re guaranteed a boost to your bottom line.

In Los Angeles, I’m Sam Eaton for Marketplace.

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