GM to Renault & Nissan: Show Me the Money

Includes: GM, NSANY
by: Robert Zenilman

Excerpt from our One-Page WSJ Summary:

In Alliance Talks, GM to Seek Billions From Renault, Nissan

Summary: A-three way alliance between General Motors (NYSE:GM), Nissan (OTCPK:NSANY) and Renault was originally suggested by Kirk Kerkorian (who controls 9.9% of GM) in July. Since GM now deems that Renault and Nissan need the alliance more that it does, it is demanding a multi-billion dollar “equalizing contribution” from the other automakers as an incentive for GM to join the alliance. GM believes it has turned the corner, and might not need Nissan’s and Renault’s help. GM also knows that alliances don't always work; it experienced a failed alliance with Italy’s Fiat (NYSEARCA:FIA). Aside from the turnaround, GM executives assert that it has greater global-reach than the other two companies; Nissan’s sales surged in 2005 but have fallen in 2006, and Renault has only four new models scheduled between now and late 2007. Nissan & Renault CEO Carlos Ghosn is now trying to portray the benefits of the alliance as a defensive move against Toyota (NYSE:TM), which continues to fire on all cylinders.
Related links: Full WSJ articleGM/Nissan-Renault Alliance Talks 'Bog Down'Jerry Flint Believes Detroit's Luck Has Run OutGM's New 100,000 Mile Warranty Plan: Pie in the SkyIs GM Stalling With Renault-Nissan Alliance?Strange Bedfellows: GM-Ford Alliance Talks Reflect Shift in Auto Industry • BusinessWeek: Lutz Says GM Is Over the Worst • Forbes: Ghosn Sees GM Reluctant Ahead Of Meeting
Potentially impacted stocks and ETFs: Other auto stocks: Ford (NYSE:F), DaimlerChrysler (DCX), Honda (NYSE:HMC)

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Tagged: , Auto Manufacturers - Major
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