Name: Rick Wagoner
Title: President and CEO, General Motors
Theme: Alliances allow competition and cooperation to co-exist and are GM's strategy for global growth
Forming strategic partnerships with other automakers is faster, cheaper and more satisfying than buying companies outright, said Rick Wagoner, the new president and CEO of Gneral Motors.
In March, GM bought 20 percent of Fiat Auto, while Fiat got 5.1 percent of the US giant. General Motors has minority tie-ups with several other carmakers.
'Alliances are a key part of the solution to the question of how to get global and do so fast,' said Wagoner.
He cited Opel's rapid development of the Agila minicar using a Suzuki platform.
'The best phrase to describe our company is the GM network,' Wagoner said. 'It is built around the idea that with the right partnership approach one-plus-one can sometimes equal more than two. That's why we are increasingly comfortable with the concept of leverage over limitation, cooperation over control and alliance over acquisition.'
GM has allied with partners it can work with and that did not want a full merger, said Wagoner.
'Alliances can provide many of the benefits of an acquisition without the capital, cultural and marketplace trauma involved in a full merger,' he said. 'Instead, we have management on both sides focused on winning in the marketplace and focused on the synergies we agreed on in advance.'
Alliances are also more 'capital advantageous' and allow GM to use its financial resources on innovative products and services, he said.
Wagoner said GM3/8s partners offer various strengths:
Fiat is strong in Europe and South America
Suzuki has expertise in low-cost minicars and small engines
Fuji Heavy Industries' forte is four-wheel-drive technology and continuously variable transmissions
Isuzu's strength is commercial vehicles and diesel engines.
The Fiat alliance is by far GM's biggest.
The partnership will 'allow us to realize synergies faster than in a full buyout, if that option had even been available,' said Wagoner.
He said GM and Fiat have discovered more savings than they first thought possible. He said there are excellent opportunities for both to grow their businesses in Europe and South America. These two markets will be the key focus of '99 percent of our efforts,' said Wagoner.
Initially, the partners will focus on joint powertrain development and purchasing in Europe and South America. Eventually, they plan to look at financial services, distribution opportunities and even product-sharing.