Posted on 10/04/2006 11:56:46 PM PDT by Republicain
US car firm General Motors has ended talks with car alliance Renault-Nissan to form a global partnership. GM wanted to receive compensation from Renault and Nissan - which are already partners - as part of the deal, but they were opposed to this.
Renault and Nissan said they thought "compensation would be contrary to the spirit of any successful alliance".
The three-way alliance was proposed in June by GM shareholder Kirk Kerkorian in an attempt to boost GM's position.
Next steps
GM justified its demand for payment on the grounds that it would have benefited less from the merger than the two other firms.
The US company said if the deal had been agreed, this would have stopped it from joining with other firms, for which it should have been paid.
The decision to end talks comes ahead of the self-imposed 15 October deadline, by which the firms had to decide whether to proceed with full-scale talks.
But after the head of GM, Rick Wagoner, and the chief executive of Renault-Nissan, Carlos Ghosn recently met in Paris, GM officials expressed reservations about the terms of the partnership.
With talks over, it is now thought Renault-Nissan might look elsewhere for partners, and some analysts say Ford could be a potential ally.
Restructuring
GM - the world's largest car firm has seen its fortunes decline following higher labour costs and increased competition from Japanese rivals.
In 2005, the firm saw losses of $10.6bn (8.3bn euros; £5.5bn).
In an effort to turn around the iconic firm, GM embarked on significant job cuts and restructuring plans that included plant closures.
After the news that the merger talks were over, Mr Kerkorian - who holds nearly 10% of the firm - said: "We believe that General Motors' participation in a global alliance would have enabled GM to realise substantial synergies and cost savings."
Shares in GM fell on the news by over a 1%, but closed only 0.18% lower. Meanwhile Nissan closed 1% higher and Renault added 0.7%.
Carlos Ghosn, who heads both firms, developed a strong reputation for having successfully turned around the fortunes of Nissan.
Renault owns a 44.4% controlling stake in Nissan, which in turn has a 15% stake in its French partner.
Regards, Ivan
GM is living up to its nickname of "General Morons" again. Whoever heard of someone demanding money from his rescuer for the privilege of saving them?
Yes, I know. He's really a "star" in Japan for the great job he did for Nissan. I hope he will do the same for Renault now and, maybe, for Ford...
So far as I know, he's the only chief executive of a car company that has ever appeared in a comic book (in Japan).
Regards, Ivan
I had several Renaults including a 68 R-16, a few R-5's (LeCar) and an R-21(Medallion). The R-16 was the best of the lot IMO. Even so they made much better lawn ornaments and homes for Mom Natures less fortunate creatures than automobiles.
I swear they broke down so mcuh we used to use the sites of the breakdowns as driving directions. "Go to where the white R5 lost i t's brakes and hit a pole and then turn left. About a half mile later you'll see a huge stain on the road where the red R5 threw a rod. Turn right and go to where The Medallion lost it's timing gear. Another right to where the R16 blew it's radiator and you're there."
I swear that's all true!
That said I have a friend in Italy who drives an OLD r6 and he claims it's great.
prisoner6
Except that it's Renault who rescued Nissan... Don't to much read in the stars...
Good... Nissan is coming out with better cars, while GM is lagging behind. I hope they keep GMs grubby hands off Nissan. :)
Yes, I know. He's really a "star" in Japan for the great job he did for Nissan. I hope he will do the same for Renault now and, maybe, for Ford...Renault is already profitable. They make 4.1 billion (dollars) in profit in 05. Down 5% from 04. One of the European companies; Peugeot SA, FIAT, Renault or BMW might make a very interesting fit for an American company. Providing support for one segment that Detroit has been lacking on in terms of competitive products - cars. Detroit does trucks well. But cars....
Trouble is, ALL of these companies are dwarfed by the size of GM & Ford.
AND, if everybody doesn't know by now, there is no such thing as a "merger of equals". One company MUST dominate and absorb the other. Just ask D-C. Mercedes-Benz was the biggest European company taking the smallest American company and it was very rocky. Only now becoming what I think they envisioned.
My fear is that if GM or Ford took on any European partner, they would just become another Volvo or Saab. I can't speak for Volvos, but any die-hard Saab man will tell you that real Saabs died with GM taking over. Now, they're in real danger of becoming branded images of GM's Euro parts bin. A European Pontiac if you will. The true nature of Saab is dying out.
I confirm. My brother had a Saab 900 in the 80's and it was really an interesting and original car. Saab had his own identity. Now it's over, unfortunately.
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