UPDATE: MAN CEO: Truck Alliance Talks Have Gained Momentum

German truck maker and engineering firm MAN SE's (MAN.XE) chief executive Thursday said talks on a cooperation with Volkswagen AG's (VOW.XE) Swedish Scania AB (SCV-A.SK) heavy-truck brand have gained momentum recently.

"There has been an increased dynamic in the past days and weeks," Georg Pachta-Reyhofen told reporters during a telephone conference. He said the talks concern a "technical cooperation" on parts and components. "We regard it as extremely sensible to launch a cooperation regarding components," he said, adding that the industrial logic behind a possible tie-up remains unchanged.

Talks are being held "on a top level," Pachta-Reyhofen said. He declined to elaborate.

During his first major corporate event as CEO in February, Pachta-Reyhofen took a much more cooperative tone on the tie-up with Europe's largest auto maker by sales than former MAN executives, who in the past have pointed out the advantages of MAN not being integrated into Volkswagen.

Under his predecessor, Hakan Samuelsson, MAN had launched a hostile takeover bid for Scania, which turned sour due to fierce resistance from Scania's management, Swedish labor unions and Volkswagen. Volkswagen in the meantime acquired a majority stake in Scania and became MAN's largest single shareholder with a 29.9% stake.

As part of a wide-ranging management reshuffle, MAN's entire executive board left the company in November last year. The surprise departures sparked speculation that Ferdinand Piech, the influential supervisory board chairman of both MAN and Volkswagen, is enforcing his plan for a European truck alliance.

Separately, Volkswagen Chief Financial Officer Hans-Dieter Poetsch told analysts during a conference call Thursday there is a broad consensus among the three companies involved that "an intensified cooperation is to the benefit of all partners."

"Concrete opportunities of such cooperation are currently being examined," he said. "The cooperation is taking place, possibly not fully fulfilling external expectations, but I think there's a lot of [conviction] within the companies that this is mutually beneficial."

Volkswagen has so far remained tight-lipped about the prospects for a deal and the time frame for reaping efficiency savings remains uncertain.

However, earlier this month at MAN's annual general meeting Piech said he was optimistic about forging a closer tie-up, and reiterated that cost savings of up to EUR1 billion could be reached. The upcoming Euro6 emission regulation for trucks would "cost EUR1.5 billion for each of the companies," which Piech said "doesn't make sense." He pledged to allocate more time to the truck project after Volkswagen and Porsche Automobil Holding SE (PAH3.XE) ended their feud last year.

Company Web site: www.man.se

-By Christoph Rauwald, Dow Jones Newswires; [phone]; [e-mail]