Nissan, GM chiefs set to meet on alliance
Partnership gains support of analysts
By BUSH BERNARD
Staff Writer
Nissan-Renault Chief Executive Carlos Ghosn and General Motors Chairman Rick Wagoner are scheduled to meet next week to discuss a possible alliance of the three companies, a move that analysts say is starting to make more sense.
The meeting between Ghosn and Wagoner will take place in Detroit on July 14, a day when Ghosn is scheduled to attend an internal meeting at Nissan's technical center in a Detroit suburb, according to the Detroit Free Press, which quoted a person familiar with the situation.
Nissan and GM spokeswomen did not confirm that Wagoner and Ghosn plan to meet. Toni Simonetti of GM declined to comment. Frederique Le Greves, Nissan's vice president of corporate communications in North America, said she wasn't aware of a meeting between Ghosn and Wagoner.
Le Greves, who usually accompanies Ghosn when he is in the United States, said she also was not aware of a meeting that reportedly took place in Nashville on June 15 between Ghosn, GM board member Jerome York and billionaire financer Kirk Kerkorian, who controls 9.9 percent of GM's stock.
"I was with him from 8 a.m. on June 15 until 6:45 (p.m.)," Le Greves said of Ghosn's Nashville trip. "After that, I have no idea of what happened."
Neither York nor Kerkorian could be reached for comment.
Ghosn, York and Kerkorian are at the heart of a plan revealed by Kerkorian last week to bring GM into the alliance that Nissan and Renault forged in 1999. Ghosn has since become CEO of both Nissan and the French automaker.
Renault and Nissan, at Kerkorian's urging, are each reportedly prepared to buy up to 10 percent of GM's shares, which combined with Kerkorian's own stake could be used to put further pressure on Wagoner or replace him with Ghosn.
Meanwhile, flight logs of York's private jet available through flightaware.com, an online flight tracking service, show that his Gulfstream jet arrived in Nashville from Oakland County International Airport near Detroit around 4:30 p.m. on June 15.
That's about the time that Ghosn was in town speaking to reporters in Cool Springs, a few miles from the Nashville airport, about Nissan's plans to build a $100 million headquarters building here.
York's jet left Nashville for Detroit at 11:21 p.m., June 15, the Web site says. Flight logs of Kerkorian's corporate jet were blocked from tracking on the site.
General Motors Corp.'s board of directors probably will green-light further discussions on a global alliance with France's Renault SA and Japan's Nissan Motor Co. when members meet Friday, analysts told the Detroit Free Press on Wednesday.
The board has little choice but to consider the proposal, Brad Rubin, a senior credit analyst at BNP Paribas, told the newspaper.
"What are the options, to say we're not going to consider it?" Rubin said. "Investors would be quite upset if they didn't research it. They need to ? put some sort of fact-finding mission together."
GM Chief Financial Officer Fritz Henderson will begin an analysis of the benefits of joining the alliance, a task that will take time away from the more important mission of implementing GM's plan to reverse last year's $10.6 billion in losses, Rubin
said.
One factor that could make a takeover possible is that GM is a closely held company, with six entities controlling more than 60 percent of its common stock, making it relatively easy to collect 30 percent or 32 percent of the shares, said Gerald Meyers, the former chairman of American Motors Corp. who now teaches at the University of Michigan. With about one-third of the shares, no one else would be large enough to stand in their way, Meyers said.
"Everybody else is a little guy, and when you talk, everybody else listens," he said.
Still, studying the costs and benefits of adding GM to the Renault and Nissan alliance will take time, said David Giroux, a portfolio manager at Baltimore-based T. Rowe Price Group Inc., which owns GM shares in its mutual funds.
"There's a lot of gray areas as to how something like this would work," he said.
Giroux said he would consider a move to take Wagoner out as CEO of General Motors as a "shortsighted" move at this point. "Rick does not deserve to get fired," Giroux said.
Spokesmen for GM's two largest minority shareholders, State Street Bank and Trust Co. of Boston and Capital Research and Management Co. of Los Angeles, said they could not comment on whether they would join Kerkorian.
John Chevedden, of Redondo Beach, Calif., whose family
owns about 2,000 shares of GM stock, said he would welcome Wagoner's removal because of the company's "dismal performance."
He said Ghosn would be great but questioned whether the executive known in France as "Le Cost Cutter" would have the time to run Nissan, Renault and GM.
). Historically speaking, they don't pay off more times than they do. Even the $3b it might provide GM isn't going to help all that much based on the way they have been bleeding in the past.
