Sept. 22 (Bloomberg) -- Carlos Ghosn's Renault SA and Nissan Motor Co. may start talks with Ford Motor Co. as prospects fade for a link with General Motors Corp., two people with knowledge of the situation said.

Executives from the Renault-Nissan team and Ford held discussions in the past month about exploring a possible tie-up, according to the people, who asked not to be named because the proceedings are private. William Clay Ford Jr. initially called Ghosn in July to discuss a partnership if the GM talks led nowhere, three people familiar with the matter said last month.

After two months of discussions, Renault and Nissan probably won't take an equity stake in GM, nor have the companies been able to agree on purchasing and vehicle development, people familiar with the talks said this week. The two U.S. carmakers are considering alliances as they struggle to restore profits and stem U.S. market-share losses to Toyota Motor Corp.

``If there are opportunities he'd be very stupid not to look at all of them, and on that he's absolutely right,'' Philippe Barrier, an analyst at Societe Generale in Paris, said of Ghosn. Barrier has a ``buy'' recommendation on Renault stock.

Spokespersons for GM, Renault and Nissan yesterday said negotiations continue and no decisions have been made. Ford spokesman Oscar Suris declined to comment.

Shares

Shares of GM slid 31 cents to $30.62 at 4:01 p.m. in New York Stock Exchange composite trading. Ford stock gained 24 cents, or 3.1 percent, to $8.

Renault shares in Paris were down 1.9 euros, or 2.1 percent, to 88.20 euros. Nissan's American depositary receipts fell 13 cents to $22.50.

GM investor Kirk Kerkorian proposed the talks between General Motors and Nissan-Renault on June 30 after he lost confidence in GM CEO Rick Wagoner's plan to revive the world's largest automaker, a person familiar with the investor's thinking said at the time. GM's U.S. market share has dropped to an 80- year low, and the company lost $10.6 billion last year.

Wagoner and Ghosn, CEO of both Renault and Nissan, said July 14 their companies would spend 90 days, or until mid-October, exploring an alliance.

``The Renault-Nissan alliance is open to a third partner. As far as I know, that potential opening has only been discussed with GM,'' said Frederique Le Greves, a spokeswoman for Nissan's North American unit. ``I have no knowledge of any talks with Ford.''

Ford, based in Dearborn, Michigan, lost $1.44 billion in the first half of this year. The automaker posted losses in seven of the past eight quarters on its North American auto operations and doesn't expect the unit to turn profitable until 2009. Former Ford Chief Executive Officer Bill Ford this month turned over his company's CEO post to Boeing Co. executive Alan Mulally.

Reducing Production

Ford is cutting North American production by 16 percent in the second half of the year, including a 21 percent reduction in the fourth quarter. Ford also said it will spend ``significantly'' more than the $3.8 billion it estimated for one-time costs related to job cuts.

Kerkorian initially suggested that Renault, based in Boulogne-Billancourt, France, and Tokyo-based Nissan were interested in a ``significant minority interest'' in GM as part of an alliance.

The focus of the GM-Renault-Nissan talks has been on cooperation in emerging markets such as China, Russia and Brazil, where GM has stronger sales, the people said.

Wagoner has said he remains committed to a plan to cut $9 billion from operating costs this year and GM considers that the priority as the Detroit automaker studies potential savings from an alliance.

`Natural Alternative'

``We had expected all along, frankly, that they would not come to terms with GM,'' Pete Hastings, a fixed-income analyst at Morgan Keegan in Memphis, Tennessee, said today in an interview. ``Wagoner was pretty well entrenched and had done a decent job responding to the structural problems that they had. So a natural alternative is for Ford to explore those same discussions.''

The cost of Renault's credit-default swaps rose for a fourth successive day, gaining 2 percent to 42,500 euros, according to data compiled by Bloomberg. The contracts soared almost 25 percent to 48,900 euros on June 30, the day Kerkorian urged GM to seek a three-way partnership with Nissan and Renault.

GM Swaps

The price of credit-default swaps based on GM's bonds rose $7,000 to $577,000 today, according to Deutsche Bank AG prices. The price has fallen from $900,000 since the beginning of July. Ford credit-default swaps were unchanged at $715,000.

Credit-default swaps are financial instruments based on corporate bonds and loans that are used to speculate on an increase or decrease in indebtedness. An increase in price indicates a perceived increase in risk.

Ghosn said Sept. 6 that his automakers have begun the process of hiring banks for advice on the talks. He said at the time the negotiations are ``going well.'' Ghosn, who said he isn't interested in running GM, also said he would back out if GM wasn't interested.

General Motors and Ford, the second-largest U.S. automaker, also briefly discussed an alliance or other type of cooperation of their own, a person familiar with those talks said last week.

GM Chief Financial Officer Fritz Henderson and Ford CFO Don Leclair talked after Kerkorian recommended the Renault-Nissan alliance, the person said. The talks led nowhere and haven't continued, the person said.

To contact the reporters on this story: Jacqueline Simmons in Paris at jackiem@bloomberg.net; Jeff Green in Southfield, Michigan at jgreen16@bloomberg.net

Last Updated: September 22, 2006 16:08 EDT