Nissan & Renault to buy 20% of GM

[skypoint]

GM and Renault are both very strong in Europe and a merged company would dominate the market there. I don't know if that's a good thing or a bad thing from a corporate perspective, but scale always helps. They would be able to drive down manufacturing costs through parts sharing and thus help to make sure Koreans are squeezed even tighter in Europe. Korean brands such as Hyundai and Kia do badly in Europe and a merged GM/Renault/Nissan could squeeze them tighter and stop them being become serious competitors there.

In North America, it makes more sense, since it will allow Renault to buy market presence here. GM also is the market leader in China and Renault's position there would be strenghtened (Nissan has the stigma of being a Japanese make, which rides rough in China that still remembers WW2).

All in all, I think it makes sense. And if Carlos Ghosn replaces Rick Wagoner at GM.... GM might just get turned around!

[a4_tom]

On a contrary, Korean is doing pretty well in Europe. One of my parts suppliers have told me Germany has a 6-month waiting list for Sorento diesel and 3-month wait for new Sonata.

[MKII]

Western Europe Jan - Apr 2006 Sales
http://www.acea.be/ASB20/axidownloads20s.nsf/Category2ACEA/F79F8F91AF145585C125702F0049D46D/$File/NewReg-2006-byManuf.xls

[Mitlov]

A good reason for GM to finally clean the house of its obsolete models (clones) and brands (Buick ... nice try but time to die) 

I agree about the clones (especially when it comes to SUVs and minivans, where you might have three or four brands selling the exact same vehicle), but not about Buick.  I see plenty of Buicks on the road, and while the average owner might be 65+ years old, they must be selling at a somewhat decent rate.

[sirAQUAMAN64]

I think this only benefits Kerkorian and is very short-sighted.

GM would be better to work on it's own. It's already large enough, and I firmly believe they can perform better in the future and are working at a good pace to make it there.

[Wolfe]

I agree SirA.

Kerkorian is looking after his own interests first, whether or not this is in GM's long term interest. That's what I would do if I were in his position.

I also agree that GM is large enough already. How would it help them to add anything from Renault/Nissan? Sometimes these partnerships work well and add value to both partners but I don't see what Renault could bring to GM that would make GM a stronger company (besides a cash infusion).

I think GM has to get better, not bigger, in order to survive and grow.

[smainville]

I don't agree here, much like DC, Hyundai and Mitsu are in together to fabricate engines, This GMNR alliance could do the same, with ie, the Nissan V6 in many models, maybe the CVT etc. etc.  Streanline, become more efficient and save $$$

[MKII]

The Nihon Keizai business daily said Nissan Motor Co  and Renault SA were looking at three main areas of potential cooperation with GM -- parts procurement, and environmental and safety technology.

RENAULT STATEMENT


The Renault-Nissan Alliance is an open partnership, which has never been restricted to two partners. Under the right circumstances and with the appropriate partners, the Alliance could be expanded further.  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.

Mr.Ghosn, President and CEO of Renault and Nissan was approached by Mr.Kerkorian, Mr.York and representatives of Tracinda Corporation to assess the merits of GM joining the Renault Nissan Alliance.

At this point, it is necessary that GM Board and top management fully support this project in order to start the study of this opportunity after agreement of Renault and Nissan boards.




Press contact  : Anne-Emmanuelle Dognon-Remy +33 (0)1 76 84 64 69
Websites : www.media.renault.com – www.renault.com

[sirAQUAMAN64]

People talk about the Nissan VQ35 V6 engine, and while good, GM Powertrain is already coming to market with 4, 6, and 8 cylinder engines that are among the best out there.

I can't see how GM could benefit from this at all. It has the safety, technology, engines, world market presence, manufacturing ability, etc already.

[MKII]

Just a couple of reasons-

Wall Street continues to be smitten by the idea of a GM/Nissan alliance, with virtually every investment brokerage either raising GM's outlook rating or placing the stock on watch for possible upgrade. GM's stock was trading at $29.40 in midday trading Wednesday, up sharply from recent lows of around $19 in early May.

The three-way partnership would create a giant automotive group with an annual vehicle output of more than 15-million units a year

[sirAQUAMAN64]

The three-way partnership would create a giant automotive group with an annual vehicle output of more than 15-million units a year

Yes, but can they integrate their operations and cultures into profitability, and if they do will that mean reduced sales through killing some brands/overlap?

Otherwise, it's just a giant mess and more bureaucracy.

[MKII]

• Truth No. 1: Wall Street thinks Ghosn is a better CEO than Wagoner. That's why GM stock jumped $2.35 on Friday at news of a possible GM-Ghosn alliance.

• Truth No. 2: Wall Street -- and much of Main Street USA, unfortunately -- believes that GM's cars and trucks are inferior to foreign-owned competitors'. That's why the resale price of used cars and the residual values of new vehicle leases are lower than those of key competitors.

Nothing short of a totally transparent, bold turnaround plan will change minds on Wall Street, or on Main Street, or in the mischievous minds of Kerkorian and York, who want to keep this pot boiling so GM's stock price doesn't cool off.

IMO, it is good to see a shareholder (Kerkorian) make some noise, wouldn't you if you were the 4th biggest investor of a large corporation that is sinking, with no clear indication or sales targets. The only news Wagoner spews out is lay-offs and factory closings, but never any specific goals or sales projections.

Now the Blue Oval needs some heavy hitter share holder to kick some ass.

[G0dspd]

According to the Japanese business daily Nhon Keizai, Nissan and Renault have already decided what areas of cooperation they would seek from General Motors if a proposed alliance between the three companies became a reality. Those three areas are parts procurement, environmental and safety technology.

Speculation abounds as to what shape such an alliance might take if it were to happen. Would we see Nissan-badged Chevrolets? Or perhaps Saturn-badged Renaults? Rather, it seems such an alliance would mostly involve technology sharing and greater economies of scale for all three companies. Nissan could certainly benefit from GM's upcoming hybrid drivetrains that will be sold in the Saturn VUE Green Line and Chevy Tahoe Hybrid. Meanwhile, we'd love to see a GM midsize sedan driven by Nissan's VQ V6.

While the potential results of such cooperation are fun to ponder, GM's board first has to approve exploring the idea of such a relationship with Nissan/Renault. Apparently the issue is going to be on the table tomorrow in a meeting of GM's board. We'll be eager to see what decision gets handed down.
http://www.autoblog.com/2006/07/05/nissan-renault-knows-what-it-wants-from-gm/

I don't think you'll see a Nissan badge on a Chevy anytime soon.  Maybe in a few years?

[articsteve]

Industry tie-up benefits are elusive, Zetsche warns

Reuters / July 5, 2006 - 7:00 am
 
TOKYO -- DaimlerChrysler CEO Dieter Zetsche said on Wednesday cost-saving benefits from alliance pacts were hard to come by, cautioning against optimism amid talk of a possible three-way tie-up between General Motors, Nissan Motor Co. and Renault SA.

"When you refer to the most recent speculation of that alliance, you're talking about pretty high volumes but reduced incremental saving potential," he said, noting that cost benefits were small when more than a million vehicles were involved in sharing components.

"There are very few suppliers that are able to offer you parts in that quantity, and the scale effect goes to zero," he told a small group of reporters at a roundtable meeting in Tokyo.

The German-U.S. automaker has had its share of difficulties with its own merger, between Daimler-Benz and the Chrysler Corp. in 1998. It later brought Mitsubishi Motors Corp. into the circle, but dissolved that equity relation two years ago after years of a thinly veiled clash of corporate cultures.

Nissan says it has no interest in any outright merger, and CEO Carlos Ghosn has said the Nissan-Renault partnership would only consider deals that would benefit all parties involved at the operational level.

But Zetsche, credited for bridging the cultural gap between DaimlerChrysler's Stuttgart headquarters and the Chrysler group, which he headed until last year, said realizing pure operational synergies from a shared vehicle platform, for instance, was much more complicated than it might at first seem.

"You have to look at the life cycle of vehicles and the matching of renewal cycles," he said.

"It's not only that it takes five or six years until you have this opportunity of joining forces for one platform, but all of it has to match -- by accident, I would say -- the portfolio of the other guy.

"So even though every M&A guy will immediately give you billions and billions of synergies if you only think about an alliance, the real world is somewhat tougher and longer on the time line," he said.

Nissan and Renault, led by Ghosn, have said they were open to exploratory discussions for a possible tie-up with GM as proposed on Friday, June 30, by billionaire investor Kirk Kerkorian, provided the U.S. automaker's management endorsed the plan.
 

[smainville]

According to the Japanese business daily Nhon Keizai, Nissan and Renault have already decided what areas of cooperation they would seek from General Motors if a proposed alliance between the three companies became a reality. Those three areas are parts procurement, environmental and safety technology.

Speculation abounds as to what shape such an alliance might take if it were to happen. Would we see Nissan-badged Chevrolets? Or perhaps Saturn-badged Renaults? Rather, it seems such an alliance would mostly involve technology sharing and greater economies of scale for all three companies. Nissan could certainly benefit from GM's upcoming hybrid drivetrains that will be sold in the Saturn VUE Green Line and Chevy Tahoe Hybrid. Meanwhile, we'd love to see a GM midsize sedan driven by Nissan's VQ V6.

While the potential results of such cooperation are fun to ponder, GM's board first has to approve exploring the idea of such a relationship with Nissan/Renault. Apparently the issue is going to be on the table tomorrow in a meeting of GM's board. We'll be eager to see what decision gets handed down.
http://www.autoblog.com/2006/07/05/nissan-renault-knows-what-it-wants-from-gm/

I don't think you'll see a Nissan badge on a Chevy anytime soon.  Maybe in a few years?

More like Chevy badged Nissans or Renault for some small car, I can see that.  But again I think the collaboration would be at the engine, transmission level and more.  Calibers use a Nissan CVT transmission.

[Snowman]

Industry tie-up benefits are elusive, Zetsche warns

Reuters / July 5, 2006 - 7:00 am
 
TOKYO -- DaimlerChrysler CEO Dieter Zetsche said on Wednesday cost-saving benefits from alliance pacts were hard to come by, cautioning against optimism amid talk of a possible three-way tie-up between General Motors, Nissan Motor Co. and Renault SA.

"When you refer to the most recent speculation of that alliance, you're talking about pretty high volumes but reduced incremental saving potential," he said, noting that cost benefits were small when more than a million vehicles were involved in sharing components.

"There are very few suppliers that are able to offer you parts in that quantity, and the scale effect goes to zero," he told a small group of reporters at a roundtable meeting in Tokyo.

The German-U.S. automaker has had its share of difficulties with its own merger, between Daimler-Benz and the Chrysler Corp. in 1998. It later brought Mitsubishi Motors Corp. into the circle, but dissolved that equity relation two years ago after years of a thinly veiled clash of corporate cultures.

Nissan says it has no interest in any outright merger, and CEO Carlos Ghosn has said the Nissan-Renault partnership would only consider deals that would benefit all parties involved at the operational level.

But Zetsche, credited for bridging the cultural gap between DaimlerChrysler's Stuttgart headquarters and the Chrysler group, which he headed until last year, said realizing pure operational synergies from a shared vehicle platform, for instance, was much more complicated than it might at first seem.

"You have to look at the life cycle of vehicles and the matching of renewal cycles," he said.

"It's not only that it takes five or six years until you have this opportunity of joining forces for one platform, but all of it has to match -- by accident, I would say -- the portfolio of the other guy.

"So even though every M&A guy will immediately give you billions and billions of synergies if you only think about an alliance, the real world is somewhat tougher and longer on the time line," he said.

Nissan and Renault, led by Ghosn, have said they were open to exploratory discussions for a possible tie-up with GM as proposed on Friday, June 30, by billionaire investor Kirk Kerkorian, provided the U.S. automaker's management endorsed the plan.
 

  A CEO warning a competitor about the problems with a merger. Nice tactic Dr. Z.

[sirAQUAMAN64]

I believe Zetsche. If you recall the news for years during and after the merger, I think what he's quoted as saying is on the mark.

Some/most of you may be down on GM, but I have other ideas and would like to see GM rescue GM as I believe they can and will. Stock markets are all about speculation and stock pricing is not always based on rational thought, so I'd hardly go by that being the indication it's a good move.

[MKII]

A partnership, which could bring GM a cash injection of $3 billion or more, could prove helpful in an increasingly competitive global environment, in which Japan’s Toyota is rapidly ascending and could soon eclipse GM as the world's biggest automaker, Casesa added.

While GM leads the world automotive market with a 14.2 percent share, its supremacy is under threat from Japan’s Toyota, which has a 13.8 percent market share. The combination of GM, Renault and Nissan would have a world market share of 23.7 percent, according to numbers from automotive forecasting company CSM Worldwide, leaving Toyota a distant second runner.

quote from sirA  'Some/most of you may be down on GM, but I have other ideas and would like to see GM rescue GM as I believe they can and will. Stock markets are all about speculation and stock pricing is not always based on rational thought, so I'd hardly go by that being the indication it's a good move'

Care to share your ideas/thoughts  that would inject some confidence in some of us naysayers/financial guru's/shareholders  that GM can change peoples perception that GM vehicles are a better choice then the competition. 

[gta_driver]

The Nihon Keizai business daily said Nissan Motor Co  and Renault SA were looking at three main areas of potential cooperation with GM -- parts procurement, and environmental and safety technology.

RENAULT STATEMENT


The Renault-Nissan Alliance is an open partnership, which has never been restricted to two partners. Under the right circumstances and with the appropriate partners, the Alliance could be expanded further.  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.

Mr.Ghosn, President and CEO of Renault and Nissan was approached by Mr.Kerkorian, Mr.York and representatives of Tracinda Corporation to assess the merits of GM joining the Renault Nissan Alliance.

At this point, it is necessary that GM Board and top management fully support this project in order to start the study of this opportunity after agreement of Renault and Nissan boards.




Press contact  : Anne-Emmanuelle Dognon-Remy +33 (0)1 76 84 64 69
Websites : www.media.renault.com – www.renault.com

For you old timers the statment sounds almost creepily similiar to the ill fated BMW-MG Rover alliance in the 90's. We all know how that turned out. BMW helped prop up MG Rover for a few years with bimmer cash, asked the union for concessions in a restructuring effort and when not given to the extent they where asking, basically sold of any brands worth anything (i.e. Land Rover) to other automakers, Kept the 4wd technology (later to be used BMW SUV development),  kept some parts technology and designs, sold off a few car model designs to Chinese car companies and then sold whatever was left of MG Rover to the caretaker Phoenix group for next to nothing. Eventually MG Rover ceased to exist. I Hope this is not GM's fate.

[Snowman]

For you old timers the statment sounds almost creepily similiar to the ill fated BMW-MG Rover alliance in the 90's. We all know how that turned out. BMW helped prop up MG Rover for a few years with bimmer cash, asked the union for concessions in a restructuring effort and when not given to the extent they where asking, basically sold of any brands worth anything (i.e. Land Rover) to other automakers, Kept the 4wd technology (later to be used BMW SUV development),  kept some parts technology and designs, sold off a few car model designs to Chinese car companies and then sold whatever was left of MG Rover to the caretaker Phoenix group for next to nothing. Eventually MG Rover ceased to exist. I Hope this is not GM's fate.

Current Drives-->'04 Acura EL-'03 Land Rover Freelander HSE-'93 Infiniti Q45t
"I don't apologize for being rich."

That’s quite the sig. you have there GTA. Does this mean your air to fuel ratio requires adjustment?