Article

GM investor urges major tie-up

Kerkorian says struggling automaker should partner with Nissan and Renault; GM shares soar.
June 30 2006: 11:26 AM EDT


DETROIT (Reuters) -- One of the largest investors in General Motors Corp. Friday urged the world's largest automaker to consider a three-way partnership with Nissan Motor Corp. and Renault SA, sending shares of GM up sharply in opening trade.

GM (up $1.25 to $28.69, Charts) shares rose over 6 percent to $29.90 on the New York Stock Exchange after trading higher before the bell.

In a letter to GM Chief Executive Rick Wagoner, Tracinda Corp., the investment arm for billionaire investor Kirk Kerkorian, suggested the automaker form a committee to "immediately and fully explore" the possibility of a partnership under which Nissan and Renault would buy a "significant minority interest" in GM.

Kirk Kerkorian, GM's largest single shareholder, owns about 10 percent of GM. His representative, Jerry York, sits on GM's board and the automaker since January has followed a number of his suggestions for a faster turnaround, including executive pay cuts and a reduced dividend.

"We believe that participating in a global partnership-alliance with Renault and Nissan could enable General Motors to realize substantial synergies and cost savings and thereby greatly benefit the company and enhance shareholder value," Tracinda wrote in the letter.

GM, which lost $10.6 billion in 2005, is struggling with high labor costs, sluggish sales of profitable sport utility vehicles amid high gasoline prices and loss of U.S. market share to foreign rivals.

The automaker is in the middle of a sweeping turnaround that includes slashing 30,000 jobs and closing 12 plants.

The letter comes after a quarter in which analysts were growing more optimistic about GM's cost-cutting efforts.

In the letter, filed with the Securities and Exchange Commission, Tracinda said it has been in talks with Carlos Ghosn, CEO of both Renault and Nissan.

Renault, which has a controlling stake in Nissan, declined comment. A Renault spokeswoman said, "We have no comment."

Nissan spokesman Simon Sproule said: "At this stage Nissan would not have a comment."

GM said it has received no offer or proposal from Nissan Motor or Renault to participate in a partnership, but its board will consider the request by Tracinda to explore the possibility of an alliance.

"The Tracinda request will be taken under advisement by the GM board of directors," GM said in a statement.

 

i hope not either. i have no idea what nissan/renault/infiniti would have to gain from such a partnership

 

LOL, so instead of just GM going into the crapper, it would include Renault and Infiniti..........UGGGGG....

C.

 

Nothing. They would bring great quality control and systems to GM, along with great tax breaks if the new joint Comp was HQd outside the US. A coworker and I were discussing this a couple months ago, that the only way for GM and Ford to survive would be to merge with a foreign auto maker and move the HQ overseas. Daimler-Chrysler ring a bell? The US tax system and unions kill any chance of global competition, the best thing to do is get the hell out. Unfortunately I see no value to Nissan.

 

First of all it's only one dude, the largest GM shareholder, who's considering a three-way partnership with Nissan. Second, there hasn't been an offer or proporsal from neither Nissan or Renault. Nissan knows after losing 10.6 billion dollars in 2005, teaming up with GM is a lose/lose situation for them. They rather consider Honda as a partnership than GM.

edit: My suspicions were right that Kerkorian just wants Nissan/Renault to buy a significant miniority interest in GM. Like I always say "It's always nice to want things". http://www.rte.ie/business/2006/0630/gm.html

 

There's no way Nissan would partner with Honda unless Nissan went to the serious crapper (again).

Hey LS2 powered Gs and Zs wouldn't be a bad thing right? hehe

The Daimler Chrylser worked out well. As the RWD 300 and it's related cars are all on older Daimler chassis.

But I also fail to see the immediate gain to Nissan. Maybe to access GM's truck technology or diesel engine tech?

 

it would be one of stoopidiest mistake that nissan every made..gm is only doing this cause dey suck *** and trying to gain some momentum by teaming up with nissan..

but if dey do team up..gm would be out of the picture..cause there is no way nissan would be nissan/gm..

 

Aligning with GM is essentially the Kiss of Death for a car company. Although Ghosn's juggernaut is losing steam itself, it would be suicidal to add GM's woes and general bad reputation muddying Ghosn's focus and spreading him too thinly. It's just another Gordon Gecko ploy by Kerkorian to jumpstart a stock rally for GM. Sorry, I aint buying it Gecko...

 

NO!

I can't take it. I'll shoot my dog before I see a Imapala-GTR.

 

cross-platform cars for both nissan and GM? no thanks.

i'd hate to be driving a corvette35 or a 350camaro

just like how people drive a mercedes-benz CLKcrossfire

 

How about Nissan/Mercedes cross platform?

You won't see a 350 camaro as of right now as they don't exist until they reveal their retro version.

 

Noooooooooooooooooo!!! One of the reasons I enjoy that my mom bought the G was to get rid of her Intrigue. Thought I was gettin away from GM. I hope they don't join. Once again I'd be back in the world of GM and that would be major suckage.

 

actually

Nissan/Renault brought 20% of GM. not GM trying to find partnership, in otherwords, Nissan/Renault is gonna take over GM soon!!!!

 

Honestly, there would be some perks when it comes to technology. Cadillac's up-and-coming Sigma II platform as well as GM's RWD Zeta (rumored to underpin all future mid/large Pontiac's, the next Impala, Camaro, Buicks, and others) will be top-notch platforms for their class that, if Nissan/Infiniti used, would greatly benefit them.

GM is also working on new hybrid systems, as well as being the leader in the alternative-fuel hydrogin technology, and their trucks are once again tops.

GM has some outstanding designers and idea-guys. Put that together with the leadership and cut-effectiveness of Nissan/Inf/Renault, and you have a potential of creating Cadillacs and Infiniti's that would put BMW, Mercedes, Audi, Acura, and others on the defense when combining Caddy and Infiniti resources, technology, quality, and so forth. And think of a Zeta-underpinned Maxima, or an LS7 (505 HP 7.0 powering the Z06) powered Z-car...

How about a hi-po G35 running on the same 500-550 HP V8 rumored to power the next-gen CTS-V. Or a Titan with the same work-ethics that are put into the Silverado?

Nissan/Infiniti/Renault will benefit by a ton if they use the global resources of GM, getting to work w/ Holden, Saab, Opel, Saturn, Chevrolet, Cadillac, Buick, GMC, and many other brands. GM has the technology and resources, but does not have the financial or leadership ability to use most of that very much, if any.

If they did this, GM would then get the leadership and financial gain to extract and USE all of that, and Nissan/Infiniti/Renault would benefit to an exponential amount.

EDIT: I just posted this over at GMInsideNews.com You guys should come on over there and give some input if ya like. We don't bite. Well, most of use don't, anyway.

 

^ Whatever this guy said, I didn't read. haha jk

It's not that Nissan can benefit a great deal from partnering up with GM, it's just that we don't want out G's to be associated with anything but Nissan.

What if Kia came out with some kick *** engine that could go 0-60 in under 5 secs and still maintain a 35 mpg. Would you want Nissan to partner up with Kia in hopes of them adding their engine into ours? It's just the reputation Nissan has and we'd like to keep it at that.