As part of the alliance, GM will buy a $1.4 billion, 20-percent equity stake in Fuji, the maker of Subaru cars and trucks. Tokyo-based Fuji will remain an independent company with Detroit-based GM as its largest shareholder.

G. Richard Wagoner

Photo: GM

"This is a partnership that will make both GM and Fuji stronger companies in an increasingly competitive, global industry," said G. Richard Wagoner Jr., GM president and chief operating officer. "The potential of the GM-Fuji alliance is significant. We come together as two healthy auto makers whose operations and areas of expertise complement one another."

Takeshi Tanaka, president and chief executive officer of Fuji, said his company was attracted to GM in part because of the success of GM's relationships with Isuzu Motors Ltd. and Suzuki Motor Corp. GM has a 49 percent stake in Isuzu and owns 10 percent of Suzuki. "The GM alliance model, which allows a high level of management autonomy based on the principle of a true partnership, appealed to us and gave us the confidence to take this major step," Tanaka said. Tanaka said the potential for growth of FHI's business around the world was a key element that led to the agreement.

Both companies have agreed to exchange preliminary information on their ongoing work in advanced future technologies, such as alternative propulsion systems and so-called "intelligent vehicles," to identify opportunities for joint research and development. GM's equity participation indicates the seriousness with which each company is approaching the new alliance. Fuji is strong financially, so a capital infusion was not a necessity. The GM-Fuji alliance will complement the similar partnerships GM already enjoys with Isuzu and Suzuki, he added.