Nissan, Renault Want GM Stake

[Drew Dowdell]

Damn, this is news. A GM-Nissan-Renault (GMN-R? haha) would be sweet, IMO, as long as it's split in thirds.

Quick, easy question: is Renault the top seller in France? I don't know that market at all except that I think they have their own Big Three (Renault, Citroen, and Peugot).

[DetroitNut90]

Teaming up with one of the best-sellers in Europe and with an increasingly successful world-player makes great sense to me. A true alliance can only help GM right now.

[I hope GMRULES again]

Ghosn won't accept offers directly from GM, so I doubt that he would accept an offer from Tracinda. I agree with evok: this is likely just a move on Kirkorian's part to drive up the value of GM stock so he can unload it.

Or maybe a move to drive up the stock and keep it and put some more heat on management for more progress with the turnaround. Been watching the news and stock market shows for the last hour and this is the big topic. A lot of the auto experts don't see this as a good fit for GM, too much product overlap between the companies.

[Mr.Krinkle]

With GM not giving a full divended, institutional investors may be hard to come by.

and you know who's idea that was. wondering now if well have to wait past the holiday weekend. ahh, the poetic irony.

[Shantanu]

I'd hate to see such a pitiful end for one of America's great companies.

Nissan/Renault will pick and choose which GM lines they want, shut everything else. They'll raid GM for technology and factories. GM brands will die. GM's heritage will die out. All that will remain are some Silverados badged as Renaults

[Shantanu]

Damn, this is news. A GM-Nissan-Renault (GMN-R? haha) would be sweet, IMO, as long as it's split in thirds.

Quick, easy question: is Renault the top seller in France? I don't know that market at all except that I think they have their own Big Three (Renault, Citroen, and ?).

Yeah right you think anyone in France or Japan gives a f@#k about GM brands. To them they see certain technologies which they don't have, and certain factories, which they can use to churn out cars of their own design. I'm not saying all GM brands will dissappear overnight, but they will be folded into Renaults and Nissans.

And heritage products like Camaro, which may not make a whole lot of business sense but are good making fans happy and building the brand, are finished for sure. You think anyone in Paris gives a $h! about Chevy Camaros? yeah right.

[Shantanu]

It's not like they are buying the whole company, the articles state it would be a minority stake. Their sales numbers wouldn't even be counted together if it does happen.

Does that mean GM would be buying a stake in Nissan as well?

See even if they buy 20 or 10% of the company, that gives a big share of control. Ford only owns 30% of Mazda and they effectively run the company.

Nissan can say something like, "We don't want anymore Cadillac CTS's being built, because we think it hurts our G35 sales", and if they own something like 20% of the company they can get their way with that.

[4gm]

Can GM block a sale of shares from Tracinda to whatever company it doesn't find fit to own such a large stake? I don't know how that works.

[PONTIAC06]

I can see some positives and some negatives, but it would be a much better deal if GM got 10% in each Renault and Nissan...and they each got 10% of GM...make the game a little more even...Plus, like some people said earlier...If GM has to become part of an allegiance to survive, better to be with Renault/Nissan than anyone else...Nissan/Infinit's are the only non-domestic brand I would consider for an everyday car.

[evok]

York is getting his ass reamed....you can count on that.

Why? and by who exactly?

[Angry Dad]

Has everyone forgotten that Kirk is still losing money on this stock buy?

If any company will get beat up if they merge it will clearly be Nissan. It serves no purpose excpet in the very low end of Asian markets.

[VenSeattle]

Yeah right you think anyone in France or Japan gives a f@#k about GM brands.  To them they see certain technologies which they don't have, and certain factories, which they can use to churn out cars of their own design.  I'm not saying all GM brands will dissappear overnight, but they will be folded into Renaults and Nissans.

And heritage products like Camaro, which may not make a whole lot of business sense but are good making fans happy and building the brand, are finished for sure.  You think anyone in Paris gives a $h! about Chevy Camaros?  yeah right.

This isn't a hostile take-over... Nissan & Renault are looking for "investment opportunities" and to add to their alliance... they're not looking for an estate sale. It would serve no purpose to invest 20% into GM just to tear it apart. If that was the case, (based on some analysts) it would be smarter for them to wait until after GM goes Bankrupt to pick up the pieces they want for pennies on the dollar.

[Shantanu]

This isn't a hostile take-over... Nissan & Renault are looking for "investment opportunities" and to add to their alliance... they're not looking for an estate sale. It would serve no purpose to invest 20% into GM just to tear it apart. If that was the case, (based on some analysts) it would be smarter for them to wait until after GM goes Bankrupt to pick up the pieces they want for pennies on the dollar.

When GM owned 20% of Subaru, Suzuki, Fiat, etc. it gave them a lot of say over how these companies were run. As such Subaru never got to be more than a niche player in the U.S. market, and Suzuki never amounted to much in the U.S. Fiat was kept out of America, probably in no small part due to avoiding overlap with GM.

This deal will be all about eliminating overlap. If these guys own 10-20% of GM, that gives them a lot of clout. They can cherry pick certain GM cars to add to their brands to make them look good. And they can eliminate areas of overlap, and my guess is that the GM products will be the ones on the receving end.

[Sixty8panther]

Suzuki never amounted to much in the U.S. 

What was Suzuki supposed to amount to?

Fiat was kept out of America,

GOOD! Thank God. Fiats Suck.

Edited July 1, 2006 by Sixty8panther

[Shantanu]

That's exactly the point, fool. They were kept out because GM had power over them. Now that Fiat is no longer under partial GM control, they've announced plans to come back around 2010. That's more competition in an already overcrowded U.S. market.

If Renault-Nissan own a sizeable chunk of GM (even 15%), they get a big say in what goes on. They'll hold GM's products back to put their own products ahead. There's not going to be anymore "halo cars" like the Cadillac XLR, Pontiac Solstice, etc. out from GM, because GM brands will just be a collection of factories for the benefit of Renault-Nissan advancement.

[DetroitNut90]

And, if it is a true alliance, GM will be able to acquire share in Nissan and Renault. That way, this sort of thing can be prevented.

I really doubt that Renault would want to get ahold of the GMT900s. Renault focuses more on cars-specifically small cars-than they do large trucks, so I think that the GMT900s would be safe.

[Shantanu]

And, if it is a true alliance, GM will be able to acquire share in Nissan and Renault. That way, this sort of thing can be prevented.

And where's GM going to get the money to buy a chunk of Renault and Nissan?

GM worth = $15 billion

Renault and Nissan = Privately held, but probably worth $60+ billion each

I really doubt that Renault would want to get ahold of the GMT900s. Renault focuses more on cars-specifically small cars-than they do large trucks, so I think that the GMT900s would be safe.

Not instantly, but if Renault buys out GM, I personally don't see Chevrolet existing 15 years from now. They're doing it to make their own brands powerful by cherry picking the best bits of GM. And full size trucks sold with $10,000 worth of profit are the crown jewels of the auto industry.

Edited July 1, 2006 by Shantanu

[ellives]

I think the point here is to really focus on what GM gets out of it. I don't see much really.

[sciguy_0504]

Why? and by who exactly?

Not to be pissy but can we lay off the Josh bashing a little bit?

[97regalGS]

As confused as I may be as you claim...one thing I am certain on is I am sick of reading your bull$h! day in and day out like some are sick of reading Dollingers.

good. then please take BM and go away.

[evok]

And where's GM going to get the money to buy a chunk of Renault and Nissan?

GM worth = $15 billion

Renault and Nissan = Privately held, but probably worth $60+ billion each

Not instantly, but if Renault buys out GM, I personally don't see Chevrolet existing 15 years from now.  They're doing it to make their own brands powerful by cherry picking the best bits of GM.  And full size trucks sold with $10,000 worth of profit are the crown jewels of the auto industry.

GM has to agree to any of this, first. What does GM get out of any equity swap at this time. Especially with the stock value where it is.

GM does not need the cash so any cash infusion argument is pointless. The GMAC deal is still pending and is worth 14 billion over three years.

Access to markets? What markets? Japan no way.

Nissan and Renault have everything to gain and GM nothing.

And if there was a true merger? - I highly doubt Nissan and Renault would take on GMs 15 billion in auto debt plus the 100 billion in GMAC debt.

Because GM is coming from a weak point because of the Market Cap of the company any deal is all but pointless.

GM has problems but not to type of problems that would make them sell out like that. Share holders would be screwed even worse than now.

[Cortazzo]

I'm surprised how even the pros and cons are on this site, considering the rabid reaction I got on another popular GM fan site for saying I thought the alliance was a good business decision.

This would be not much more than a technology/purchasing alliance where the 3 parties would develop joint platforms and powertrains and share costs on things like diesel nad hybrid development. It's smart, and it will help GM produce better vehicles for less $. I'd welcome GM utilizing more european small car platforms and Nissans RWD platform for small/medium sized cars to fill out holes in its lineup w/o reinventing the wheel. But i'd ultimately hope that the 3 could use eachothers best practices to improve, especially GM in the areas of platform development/sharing, powertrain utilization, and supplier relations. Nissan excels in these areas, and GM could have a lot to gain.

From the tone of Nissan/Renault's response statements, it looks like it would welcome an additional partner, not a takeover targer. So GM would probably also buy a piece of the partner companies as well, so there is no dominant party. Then they can buy common components and develop platforms that will spread R&D costs of millions and millions of units, and we can all beat back the onslaught that is Toyota.

[Shantanu]

GM has to agree to any of this, first. What does GM get out of any equity swap at this time. Especially with the stock value where it is.

What equity swap? There's no equity swap.

It's one thing if GM took some of its treasury stock and traded it with Nissan/Renault, though it would be lopsided because those companies are worth about 4 times as much. Kind of like the GM/Fiat stock swap, except put GM in Fiat's position now.

Kerkorian owns 10% of GM and he can do whatever the hell he wants with it. If he wants to sell that to Nissan and Renault, it's not GM's business to "approve it".

[Robert Hall]

I think the point here is to really focus on what GM gets out of it. I don't see much really.

I could see the potential of GM benefitting from Nissan's platforms and drivetrains(imagine a Malibu with Nissan's excellent V6 and transmissions instead of the same-old, same-old OHV V6 w/ 4spd auto) and both Renault and Nissan's small car expertise..

[Shantanu]

I'm surprised how even the pros and cons are on this site, considering the rabid reaction I got on another popular GM fan site for saying I thought the alliance was a good business decision.

This would be not much more than a technology/purchasing alliance where the 3 parties would develop joint platforms and powertrains and share costs on things like diesel nad hybrid development.  It's smart, and it will help GM produce better vehicles for less $.  I'd welcome GM utilizing more european small car platforms and Nissans RWD platform for small/medium sized cars to fill out holes in its lineup w/o reinventing the wheel.  But i'd ultimately hope that the 3 could use eachothers best practices to improve, especially GM in the areas of platform development/sharing, powertrain utilization, and supplier relations.  Nissan excels in these areas, and GM could have a lot to gain.

From the tone of Nissan/Renault's response statements, it looks like it would welcome an additional partner, not a takeover targer.  So GM would probably also buy a piece of the partner companies as well, so there is no dominant party.  Then they can buy common components and develop platforms that will spread R&D costs of millions and millions of units, and we can all beat back the onslaught that is Toyota.

Economy of scale is not a problem at GM. They have 15% of the global automarket.

GM's problem is high health care costs which eat into profits, making them almost negligible.

I personally don't want Nissan taking GM's 6-speed automatic transmissions and the Corvette engine and putting them in their own cars to make them better.

And Nissan and Renault have very little that I am interested in. That said, I don't think that those guys will be giving up their crown jewels (like the VQ engine) to make Chevrolets and Pontiacs better. The flow of technology and resources will be one way.

Edited July 1, 2006 by Shantanu

[Shantanu]

I could see the potential of GM benefitting from Nissan's platforms and drivetrains(imagine a Malibu with Nissan's excellent V6 and transmissions instead of the same-old, same-old OHV V6 w/ 4spd auto) and both Renault and Nissan's small car expertise..

And why the hell would they do that? To kill sales of their own car?

The whole point of this deal is to eliminate competition, not to increase it.

[4gm]

GM has 6 speed transmissions on the way. The have diesel engines for the low end of the market all over Europe with new diesels for the midsize market coming in a few yearrs. They have the hybrids coming. They also have plug-in hybrids just around the corner if recent news is to be believed. And GM has Daewoo to cover the development of small car programs.

What exactly would GM get from a Nissan/Renault alliance that it doesn't already have or have coming? GM seems to be getting the behind the scenes work done to get things going, however tortureously slow it seems to be. If anything, they need less options for where to put their development resources, not more, which is what they would have with another alliance.

I ain't feeling it.

Edited July 1, 2006 by 4gm

[mustang84]

I'm not in favor of this alliance, either. I have a bad feeling that GM would only end up getting the ass end of the deal. I want to see GM remain autonomous...and 20% stake is quite a bit. Something stinks about this proposed alliance.

Say no, GM.

Edited July 1, 2006 by mustang84

[Simon C]

I'd hate to see such a pitiful end for one of America's great companies. 

Nissan/Renault will pick and choose which GM lines they want, shut everything else.  They'll raid GM for technology and factories.  GM brands will die.  GM's heritage will die out.  All that will remain are some Silverados badged as Renaults

I'd hate to see it too. Only because when GM's new designs start coming out (and they will be sharp) Nissan and Ghosan will get the credit. You guys and I know that it just doesn't work that fast, but, people will say it.

And, it'll look like GM couldn't do it without some outside help.

I'd hate that!!

[Guest buickman]

Guess we didn't learn much from the Fiat fiasco. The only winner in that deal was Merrill Lynch.

Buickman

[Mr.Krinkle]

another update from bloomberg.

http://www.bloomberg.com/apps/news?pid=con...id=aha7OiNqqaxQ

initially i thought this to be a somewhat decent idea the more i read into it however im not so thrilled.

one part of this article mentions something from the letter about "synergies and cost savings that can thereby ...blah blah, blah

they are in a tight spot though, if he dumps them on the open market stock could drop pretty significantly...does he have them by the n*ts?

or will the board tell him to go take a hike?

[haypops]

Renault and Nissan = Privately held, but probably worth $60+ billion each

When did the French government devest themselves of Renault? Actually I looked it up for my self and the answer is 1996. However the government still owns 15.7%. By the way Renalut owns 20% of Volvo trucks which in turn owns Mack trucks.

[4gm]

Hmmm, I'm trying to think of ways GM's PR department can spin their rejection of this "alliance"...

"We believe forming a new alliance right now with another automaker would, at the very least, significantly delay GM's turnaround plan that is is already well underway. And at very most, could derail it completely."

or

"GM has painfully learned in the not too recent past that so-called strategic alliances very seldom turn out as originally envisioned. GM can ill afford to take a chance on another alliance at this time."

[Newbiewar]

It has its good and bad points.  The best thing is the pooling of resources - designers, engineers, parts, etc. to lower costs.

GM's technology is already spread thin between GM's lines... it doesnt need to have more brands to cover...

I think one thing here is Nissan-Renault wants to cling to GM dealerships around the world so they can expand... and make things easier...

I'd hate to see such a pitiful end for one of America's great companies. 

Nissan/Renault will pick and choose which GM lines they want, shut everything else.  They'll raid GM for technology and factories.  GM brands will die.  GM's heritage will die out.  All that will remain are some Silverados badged as Renaults

This is another thing i dont want to see...

Can GM block a sale of shares from Tracinda to whatever company it doesn't find fit to own such a large stake?  I don't know how that works.

it would cost GM a lot of money to maintain control of a company, basically having to go private, or buy a majority share of the company to keep other large investors away...

[DetroitNut90]

another update from bloomberg.

http://www.bloomberg.com/apps/news?pid=con...id=aha7OiNqqaxQ

initially i thought this to be a somewhat decent idea the more i read into it however im not so  thrilled.

one part of this article mentions something from the letter about "synergies and cost savings that can thereby ...blah blah, blah

they are in a tight spot though,  if he dumps them on the open market stock could drop pretty significantly...does he have them by the n*ts?

or will the board tell him to go take a hike?

This article has given me second thoughts...but I still think that the alliance looks good on paper.

And I also just realized that if Kerkorian is proposing this so GM's stocks go up just so he can dump them at a higher price, then I don't support this. I guess I just liked the idea of Ghosn getting active in helping GM out.

[enzl]

Yeah right you think anyone in France or Japan gives a f@#k about GM brands.  To them they see certain technologies which they don't have, and certain factories, which they can use to churn out cars of their own design.  I'm not saying all GM brands will dissappear overnight, but they will be folded into Renaults and Nissans.

And heritage products like Camaro, which may not make a whole lot of business sense but are good making fans happy and building the brand, are finished for sure.  You think anyone in Paris gives a $h! about Chevy Camaros?  yeah right.

Actually, I think Renault has shown the proper sensitivity to Nissan's past & zeroed in on synergistic strengths...If there's room in Nissan's portfolio for a historically proper Z car & GTR, GM's Camaro should be an easy do.....

Other than the very recent stumble, Nissan is on a roll, in case anyone hasn't noticed...

[red]

Without thinking too much, this alliance could be useful to both parties, but more so to GM.

Renault Nissan SA isn't perfect by any means, with some faulty product launches, poor build quality, and some cases of un-Japanese reliability. However, comparing apples to apples, Nissan has had more hits than GM. Additionally, GM could greatly benefit from Nissan's strong V6 line, since the one they have really doesn't cut the cake (too many engines, and the best is already outclassed).

Especially since the cancellation of a majority of GM's promised product onslaught that "wowed" journalists...I say this move is necessary. For every 2007 CTS, we get a Torrent and G5. This alliance may be a good step in the right direction.

[regfootball]

i am not really for this because its FRANCE and JAPAN. However, if this means we got Nissan VQ's in GM cars instead of those $h!ty 3.4's and other crappy pushrod v6's...then maybe its ok.

can we get rid of that ass Kerkorian already? I rather spend my Honeymoon in Flint watching 'Bachelor Party' having some brews with Buiickman than to have to worry about what this ass Kerkorian has in store for all of us.

Edited July 1, 2006 by regfootball

[regfootball]

i'd rather see 'synerigies' between ford and gm before they stoop to this.

if this happens, then we as a country have failed beyond all comprehension. too bad all the yuppies in this country don't care.

[4gm]

Maybe Kirk just wants GM to get some "buzz" so the stock will go up and then he can unload all his shares on the open market?

[Mr.Krinkle]

kerk is older than dirt. he wants to sell and get some cash. why is anybodies guess. how is what we are speculating.

an exchange of technologies and ideas is of course good for everyone. you, me, gm renault, etc. its how they would be delegated thats the crux of this whole development.

basically thats what makes for competetion. who has what the other one wants or needs. yes it would make toyota s*it their pants and knock them down a peg.

maybe that was the point. maybe the "buzz" is good enough to do just that.

does gm really need this? not likely. do they need gm? probably the same.

rook takes pawn.

[regfootball]

maybe it is a way to 'de-buzz' toyota.

[Newbiewar]

rook takes pawn.

you sure it isnt the french move 'En passant '

[NOS2006]

I could see the potential of GM benefitting from Nissan's platforms and drivetrains(imagine a Malibu with Nissan's excellent V6 and transmissions instead of the same-old, same-old OHV V6 w/ 4spd auto) and both Renault and Nissan's small car expertise..

No kidding! I like both your points. Nissan designs powertrains for I4s and V6s, Nissan makes suspension systems for sportscars, Renault designs really small vehicles, GM does the trucks/SUVs/V8s, and each company keeps their own designs.

Think about it.. there are RUMORS that GM has a 300 HP V6 coming out.. and Nissan already has a 300 HP 3.5L V6 (19/25 MPG in 350Z) with a 382 HP supercharged version of the engine!

[Newbiewar]

No kidding! I like both your points. Nissan designs powertrains for I4s and V6s, Nissan makes suspension systems for sportscars, Renault designs really small vehicles, GM does the trucks/SUVs/V8s, and each company keeps their own designs.

Think about it.. there are RUMORS that GM has a 300 HP V6 coming out.. and Nissan already has a 300 HP 3.5L V6 (19/25 MPG in 350Z) with a 382 HP supercharged version of the engine!

imho if GM does a 300 HP v6 it ought to be better rating then 19/25 their LS4 does 18/28 a V6 should be lighter and should be able to attain better fuel ecconomy...

[NOS2006]

imho if GM does a 300 HP v6 it ought to be better rating then 19/25 their LS4 does 18/28 a V6 should be lighter and should be able to attain better fuel ecconomy...

What I'm saying is that this could be the top engine in some cars.. like cars that would have an Ecotec or something.

[Drew Dowdell]

I could see the potential of GM benefitting from Nissan's platforms and drivetrains(imagine a Malibu with Nissan's excellent V6 and transmissions instead of the same-old, same-old OHV V6 w/ 4spd auto) and both Renault and Nissan's small car expertise..

Personally, I have more confidance in GM's new 6speed <and current 4-speed for that matter> than Nissan's CVT.

[VenSeattle]

Personally, I have more confidance in GM's new 6speed <and current 4-speed for that matter> than Nissan's CVT.

I think Nissan would too.

[Newbiewar]

I think Nissan would too.

lol how true!!!

[VenSeattle]

i'd rather see 'synerigies' between ford and gm before they stoop to this.

Honestly... I have to agree. But Nissan & Renault might ba a great asset to helping GM with supplier relationships if Delphi continued to lumber about.