Nissan, Renault and GM to form “Global Motors”?
Newswheel staff :: 06 July 2006 :: Filed under GM, Nissan, Renault, Europe & UK, US
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Kerkorian’s grand design
It’s Thursday and that can only mean one thing. Yup, it’s industry news day, complete with fabulous fiscal flights of fancy and an assortment of additional alliterative articulations…Well, that and riding out the clock until Friday. And hell, Friday’s as good as Saturday. And Saturday’s the weekend. But we digress. On June 30th Kirk Kerkorian, the metrically monikered money bags who holds a 9.9 per cent stake in bankrupt pension fu… sorry, motor manufacturer GM formally tabled a proposal for a grand alliance between Nissan, Renault and GM…
Christ, Spock, Jim. How long have I known you? Kirk reckons he can captain GM to success
According to Kerkorian, the move will “strengthen the competitive positions of all three companies.” As word of Double K’s scheme spread, GM shares jumped $3.64 to $31.08. Of course, the really interesting bit is the reaction of the management boards of all the companies involved. And current indications are that the plan could be a goer. Nissan, for instance, has since responded with the following official announcement:
"The Board of Directors of Nissan Motor Co., Ltd, met today. The meeting was chaired by Nissan President and CEO Carlos Ghosn and included discussion on the events following the initiative taken by Tracinda Corporation regarding General Motors forming a new alliance with Renault and Nissan. The Board of Directors approved that Nissan should proceed with exploratory discussions concerning a potential alliance with General Motors, if General Motors Corporation supports and endorses the proposal made by its shareholders. The Board of Directors delegated all the necessary powers to the Chairman of the Board, President and CEO, Carlos Ghosn, to conduct any discussions and negotiations on this matter."
Global Motors. It’s a nice plan, but is there a role in it for GM’s current top dog Rick Wagoner?
Short version: We’re game if you are. As for GM, motor industry tome Automotive News reports that an emergency board meeting to discuss the proposal has been called. So, far so good. But does the deal make sense? Needless to say, the very idea is already inspiring a vast array of verbiage. Suffice for now for us to pass on some of the wise words of long-time automobile industry auteur, Jerry Flint.
First and foremost, Flint reckons the deal only makes sense if Nissan’s grand fromage Carlos Ghosn receives carte blanche to run the combined entity. “Ghosn has a winning record. GM’s management doesn’t,” Flint says. Simple really. However, Flint does concede that fixing GM will be much tougher task than turning around Renault / Nissan. And the deal would inevitably lead to some tough decisions on plant closures and branding - Renault and GM-owned Opel, for instance, are direct competitors in the European market. But he also points out that Nissan’s recovery programme has slowed of late. The proposed link up with GM could be just what the Euro-Japanese outfit needs. Ride your rodent over to Forbes Online to read the rest of Flint’s revelatory ruminations.
Linkage:
Automotive News (registration required)
Jerry Flint on “Global Motors” @ Forbes
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