Corey140

The article

Kerkorian: Renault, Nissan Want GM Stake

ATSOU

NISSAN killed its' own image by offering the worst line of vehicles

omaha_lex

They were talking about this today on CNN and they mentioned the market share %s of the top auto players... GM is currently #1 with like 13% (Toyota is VERY close), and Nissan/Renault are around 9 or 10%.... a merger would mean 1 out of every 4 cars produced would be associated with GM.

RON430

According to interviews on CNBC, this is the more likely event:

Tracinda urges GM to consider Nissan-Renault alliance
By Sharon Silke Carty, USA TODAY

DETROIT — Shares of General Motors (GM) jumped more than 8% Friday after billionaire investor Kirk Kerkorian sent a letter to CEO Rick Wagoner encouraging the automaker to look into partnering with Renault and Nissan.

Through his investment firm Tracinda Corp., which owns a 9.9% share in GM, Kerkorian said he believes GM, Renault and Nissan "should explore a three-company partnership-based alliance.

Tracinda believes that such a global alliance has the potential to materially strengthen the competitive positions of all three companies in the increasingly challenging worldwide automotive industry."

Kerkorian said Nissan and Renault are receptive to the idea, and are interested in buying a minority share in GM.

GM shares closed up $2.35 to $29.79. GM warned earlier this week that June sales will be dismal compared with a year ago, when it first launched an incentive program giving employee discounts to everyone. The incentives boosted sales to record levels for June, but quickly fell off for the remainder of the year.

In a statement, GM said it has received no offer or proposal from Renault and Nissan to participcate in the two companies' alliance. "The Tracinda request will be taken under advisement by the GM board of directors," the company said.

Nissan and Renault issued a joint statement confirming Ghosn had been approached by Kerkorian to assess the merits of GM joining the alliance.

"Such an expansion would only be considered by the Alliance if it were executed in the full spirit of the Alliance, which is founded on trust, transparency, performance and the full respect for individual corporate and brand identity," the statement read.

GM's board and top management need to "fully support this project in order to start the study of this opportunity."

David Kudla, CEO and chief investment strategist for Mainstay Capital Management, said a partnership could raise $3 billion for GM "along with a potentially rewarding strategic alliance."

The automaker could also potentially benefit from Renault and Nissan CEO Carlos Ghosn, who took over Nissan in 1999 and laid out a set of public goals to return the automaker to financial health.

The turnaround is considered one of the most successful automotive restructurings in recent history.

Bean

iTrader: (1)

Get it right. Its a partnership, not a damn merger. I knew someone would fudge this up. Toyota has a "partnership" with Subaru and a few other companies as well.

DASHOCKER

iTrader: (2)

Wow I can see the VQ V6 replacing the GM 3800 V6. Nice move on Gm's part

bitkahuna

iTrader: (20)

Dumb, meet Dumber.

mmarshall

The 3.8 L GM V6 has been around for ages, though, and by now has had so many improvements it is virtually bulletproof. It is probably the second-oldest GM engine still in production...exceeded only by the Chevy small-block V8 going back to 1955. It traces its origin to the Buick 3.8L ( 231 cubic inches in those days ) V6 of the early 1960's...an engine that was known, in its early forms, for uneven cylinder firing and a rough idle. But through the years it has matured to the point that it has been on the list of 10 Best engines quite a number of times.....along with the 3.0L and later 3.5L Nissan V6's as well.

timoc42

looks just like a business move to me.

the share prices of GM went up by 8% just after the announcement...and guess who benefitted the most from that increase ?

Kirk himself, who owns 9.9% of the company..

toy4two

heard on the news on the way in the GM Board of Directors is sitting down to discuss this today.

Trexus

Good luck to all three of the auto manufacturers, they're gonna need it...

This is not new. Remember when DaimlerBenz bought Chrysler and then purchased a chunk of Mitsubishi, well it didn't work. In theory this is great. One company to be in three major markets, U.S., Europe and Asia. What makes everyone think this will work? It just might if done correctly, cohesivly and harmoniously but there will be big egos and the culture has to change and be in sync. We will have to wait and see what happens...

Gojirra99

Mon Jul 3, 2006 12:52pm ET

By Marcel Michelson

PARIS, July 3 (Reuters) - French carmaker Renault SA (RENA.PA: Quote, Profile, Research) and its Japanese partner Nissan Motor Corp. (7201.T: Quote, Profile, Research) said on Monday they were prepared to start talks with General Motors Corp. (GM.N: Quote, Profile, Research) about forming an alliance that would create the world's largest auto group.

Renault's (RENA.PA: Quote, Profile, Research) board met to discuss a proposal made by billionaire investor Kirk Kerkorian intended to prod GM into consideration of an expanded alliance with Renault and its partner Nissan.


"Exploratory discussions with General Motors, concerning an alliance, could start if General Motors Corporation makes the proposal," Renault said in a statement.

A GM spokeswoman was not immediately available. The automaker's board met on Friday to consider the Kerkorian proposal, saying it would take the matter "under advisement."

Carlos Ghosn, chief executive at both Renault and Nissan, also was authorized by Nissan's board to pursue discussions about an alliance.

Renault has a controlling 44-percent stake in Nissan. The French state has a 15.33 percent stake in Renault.

Kerkorian owns 10 percent of GM, and analysts have said his attempt to broker a deal between the three parties increased the pressure on GM's current Chief Executive Rick Wagoner and opened the door to a greater role for Ghosn, who is credited with driving Nissan's revival from 1999.

The latest moves came as GM posted a 26-percent decline in June auto sales from a year earlier in the U.S. market, where the automaker has been struggling to shore up its market share as it cuts 30,000 jobs and shutters a dozen factories.

A tie-up with GM, the world's largest carmaker by volume, could put the Brazil-born Ghosn at the helm of a group that would be breathing down the neck of Toyota (7203.T: Quote, Profile, Research) , which has a market value of some $190 billion.

But analysts doubted that the deal would benefit Renault because of the risk involved just as it has embarked on a recovery plan drawn up by Ghosn after he turned around Nissan.

Ghosn has expressed interest in buying a stake of up to 20 percent in GM at a dinner last month with Kerkorian, a source familiar with the situation said on Friday.


GM shares rose as much as 8.56 percent on Friday on Kerkorian's proposal and prospects of a speedier turnaround at the U.S. automaker, but shed 1.28 percent on Monday.

Some analysts estimate the stake could cost Renault about 2.6 billion euros ($3.32 billion).

Renault already owns the Romanian Dacia brand and has a stake in Samsung Motors of Korea. GM is the maker of Cadillac, Corvette, Saab, Hummer, Opel/Vauxhall and Chevrolet cars and has a stake in GM Daewoo of Korea.

Renault shares closed 0.24 percent up at 84.20 euros, partly on a rise in June French car sales.

STRUGGLE

"We struggle to see short-to medium-term synergies for both sides," Dresdner Kleinwort credit analyst Christophe Boulanger said in a research note to clients on Monday.

Boulanger said the acquisition would likely prompt the three rating agencies to shave at least one-point from its credit rating to BBB-level, and a potential negative outlook given the challenges to make a three-way partnership work.

Kerkorian's suggestion about a GM stake came after media speculation several months ago that Ford Motor Co (F.N: Quote, Profile, Research) had wanted Ghosn to jump ship and head the Dearborn-Mich. based group.


UBS said that the 2.6 billion euros ($3.33 billion) needed to buy 20 percent in GM could be financed by Renault if it sold its stake in truck maker Volvo(VOLVb.ST: Quote, Profile, Research).

Bruno Lapierre of CA Cheuvreux said a tie-up would work against the interests of Renault shareholders for the next three years at least. "Renault is at the start of an ambitious plan that requires many cultural changes within the group and dearly needs Mr Ghosn's management expertise in this process," he said.

SOURCE : REUTERS

retrodrive

At this point almost any alliance GM scores will raise its stock price. The company is in a dump. Clever move, no doubt.

Pearlpower

iTrader: (2)

OK, let me dive in here. As much as I do not care for GM and a majority of their products that they try to pawn off as legitimate vehicles, I do have issue with the French government having involvement with our largest corporation. Granted, it will probably happen and more mergers to come, but that does not mean I have to like it. Now if Toyota were to BUY GM, that would be different IMO, though I think Toyota buying Ford is something that could come to fruition some day.

Drocay

Sure did in my eyes.