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Nissan, GM chiefs set to meet on alliance

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Nissan, GM chiefs set to meet on alliance

Partnership gains support of analysts

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, 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

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.
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This could get interesting. Ghosn is widely credited with turning around Nissan, and as is noted in the article, he does have a reputation for cutting both costs and staff. Not sure how well that such an approach would work here in the states... Comparatively speaking, I don't have a feel for the relative strengths of French Auto workers unions vs. the UAW. All this is jumping the gun a little, as such a move wouldn't mean Wagoner was definitely out.

I can't remember which, but either the Board of Nissan or a group of major stock holders has expressed some serious concerns with becoming entangled with General Motors. Likewise, the French government has expressed some reservations (They are a minority stock holder in Renault).

Now that this is out in the press, all parties are pretty well committed to doing a due diligence study to see if this makes sense or not. Otherwise, there will be D&O issues to worry about.

Regardless of how this goes, it is pretty clear that Kirkorian is interested in making a serious play towards gaining greater control of GM.

Anyone have any idea of what he thinks about the Camaro, or more generally, GM's plan to use the Zeta Platform extensively for RWD vehicles?
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I would think Nissan would drool to get at Zeta for the next Maxima. Since the Altima went mid-size they have pretty much raided Maxima. Why buy a Maxima now when you gan get an Altima that is 95% of the car for 80% of the price?

Maxima on a rwd platform would be a whole new ballgame...a 300C competitor....not to mention the Infinity version would be a true BMW/Lexus fighter.
Would you be happy if the next-gen Impala was a rebadged M45? The answer is emphatically, yes. Nissan can only help GM; and I'm sure with all the reliability troubles so far with the trucks, Nissan would love to get some help from GM in that area. This is a win-win situation for both parties involved; now let's see it happen.
I think there could be a lot of good out of this. I see GM enthusiasts reacting out of fear instead of reading the details. This is NOT a take-over. It would be a partnership.
Since we are talking about 20% ownership max, do we really think there will cross brand sharing of platforms? And do we really think it would be a good thing if they did? I think there are too many cars that look too much alike as it is.

I am having a hard time getting excited about this idea of a merger. Frankly, other than Renault-Nissan (or maybe BMW/Mini), I can't think of one of these that has worked well. Daimler Chrysler took years to get off the ground right. I don't think Ford/Jaguar is going well, and I don't think GM is getting anything out of its relationship with SAAB. Does Fiat bring up any bad memories?

Right now, I don't see any good that can come out of this in the short run. In the long run, maybe, but not the short run.

well I think that nissan could bennifit from a merger with gm but gm could bennifit as well if they shared some parts, idea's, ect it could be a win-win situation.

We're talking 30% share total, which will give the Tracinda/Nissan/Renault group power on the GM BOD to bring in their own guy at CEO if they want, and make decisions about products, job and plant cuts, dropping brands, selling assets, etc. etc.

It requires 51% for a controlling interest, so there's no chance of a merger here, but 30% does give them muscle and votes on the other single group has that kind of stock control.

Nobody is talking Merger. Forget Merger. There is no Merger. It is an alliance or a partnership. DaimlerChrysler was a merger. This is not a merger. There would not be a GMNissan or anything like that. Nissan and Renault are current in a similar alliance but they are not merged.

Everybody needs to keep in mind survival in the global marketplace SHOULD be the top priority.

Its no accident Nissan's alliance with Renault probably saved both companies. Its no secret GM is in serious trouble. Its also very obvious that an ALLIANCE (aka a partnernship) could yield great gains in possibly some shared platforms but more than likely shared technologies, shared powerplants, combined R&D on hybrids and fuel cell cars and other future tech.

I think everyone is overreacting w/o understanding what they are actually talking about doing. Kerkorian's tracinda holds 10% of GM's stock. If Nissan and Renault each bought 10% then the group as a whole would control about a third of GM stock. There's no other groups that could really challenge that on the board of directors level. So this new group would more or less be able to direct GM. I think Kerkorian would also want to fire Waggoner and replace him with Nissan's Ghosn, who also happens to be Renault's CEO. Can one guy run all three effectively?
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I don't think Ghosn could run GM any better than Wagoner has done.

Sure things are still not great, but you gotta admit Wagoner has done a decent job getting things turned around and getting GM headed in a much better direction from when he took over for that dipshit Zarella.

Ghosn can't possibly run GM and Nissan and Renault all at the same time.
I don't think any human can, not enough hours in the day.
sorry about the word merger but as octane said wagoner has done abetter job than people give him credit for the small turn around at gm He brought us the camaro concept and he is working hard to change the image of the worlds largest auto maker something like this does not happen overnight!
I want a total and complete 100% merger, not just a partnership.
OctaneZ28 said:
I don't think Ghosn could run GM any better than Wagoner has done.

Sure things are still not great, but you gotta admit Wagoner has done a decent job getting things turned around and getting GM headed in a much better direction from when he took over for that dipshit Zarella.

Ghosn can't possibly run GM and Nissan and Renault all at the same time.
I don't think any human can, not enough hours in the day.
I agree about Ghosn and also that Waggoner has done a good job. Zarella was a disaster in no uncertain terms. Glad he went back to shilling for the contact lens company, LOL.
Tracinda wants the automaker to ally with Nissan and Renault because of a lack of confidence in Wagoner's recovery plans, a person familiar with the investment firm's strategy said earlier this week.
This is what scares me:
  • What if Kirkorkian doesn't like Wagoner's recovery plans as the story says.
  • He brings in Nissan & Renault to get a larger say in how GM moves forward by creating a voting block of approx 30% of the stock.
  • He either decides to keep Wagoner but have him do what he wants, or he brings in Ghoesn.
The big question becomes: "Is the Camaro part of the recovery plan he doesn't like?"

There are still a lot of critics of the idea out there, and if he is one, we could all find ourselves without a 5th gen. Heck, maybe he thinks gas is going to be $6.00 a gallon and GM should focus on creating cars that get 50 mpg... I don't know. Then again, maybe he is just trying to get enough buzz going so that he can get the share price back above what he paid for it and come out ahead.

Basically, I think that Kirkorian is a dangerous x factor who could kill the Camaro. Furthermore, as I stated earlier, I don't really see that there will be any great benefit from this 'alliance' (don't want to use the M word ;) ). 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.
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The M word, LOL...

This "alliance" could have several important implications for GM and Renault. It would mean;

  • More resources for R&D on both sides of the fence.
  • Possible platform and engine sharing; for example, a Zeta based Maxima, or an Xterra based H3.
  • New management for GM. If this were to happen, you can guarantee Kekorian would want Ghosn to run the show, and for good reason; he's done a lot for Nissan and Renault. He could do a lot for GM.
  • And there is the possibility that Ghosn would axe the Camaro; but Carlos is a smart guy. With all the response there has been to the idea of a new Camaro, I'm pretty sure he'd keep it around.
  • Lastly, and most importantly, it would be a fresh start for GM.
Even though I think it's a win-win for both parties, it looks to me like GM will get more out of this than Nissan/Renault will. Look at how much Mercedes helped Chrysler; Nissan could help GM in the same way.
I'd be happier if GM tell them to **** off and dies rather than start being told what to do by them.
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