Friday, June 30, 2006

GM - Renault - Nissan Alliance?

I read about this this morning, and it could be huge. Kirk Kerkorian, who is really cool in his own right (Read more about him here - have I mentioned that I love Wikipedia??), and is the third largest shareholder in GM, has proposed that GM join the Renault-Nissan alliance.

I was reading a bit about the Renault-Nissan alliance in last month's issue of Forbes (this is the link, but it's not a free article), and it is really quite impressive. I'm not sure exactly what the advantages of the alliance specifically are, other than they get to share talent and marketing research and production facilities, but one thing that was very clear is that the companies try very hard to maintain that they are two separate companies. For the first time in the history of their alliance, they have the same CEO, Carlos Ghosn, who flies back and forth between the European headquarters of Renault and the Japanese Nissan headquarters. He is, I believe, one of the hardest working CEOs I have ever heard of. He is actually paid two salaries, one from each company, he says that it is in order to show that one company is not more important to him (As the Guinness guys would say, "Brilliant!" That's like if I got my mom and dad to both give me allowance, to ensure them that I didn't love one more than the other.).

Anyway, what was so interesting about the Forbes article is that Ghosn had dismissed the idea of acquiring GM because of their troubles. Maybe Kerkorkian has floated this idea publicly to try to sway him in some way? In either case, Nissan-Renault would not have to acquire GM in order for GM to join the alliance. Nissan-Renault would only purchase a minority stake in GM. If you've got access to the WSJ, you can read the brief Kerkorian announcement here, Kerkorian Presses GM to Join Alliance of Renault and Nissan.

EDIT: Here's a free article discussing the proposal in more detailed terms.


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