DodgeIntrepid.Net Forums banner

1 - 4 of 4 Posts

·
Registered
Joined
·
3,503 Posts
Discussion Starter #1
http://money.cnn.com/2006/06/30/news/companies/gm.reut/index.htm?cnn=yes

GM investor urges major tie-up
Kerkorian says struggling automaker should partner with Nissan and Renault; GM shares soar.
June 30 2006: 11:26 AM EDT

DETROIT (Reuters) -- One of the largest investors in General Motors Corp. Friday urged the world's largest automaker to consider a three-way partnership with Nissan Motor Corp. and Renault SA, sending shares of GM up sharply in opening trade.

GM (up $1.25 to $28.69, Charts) shares rose over 6 percent to $29.90 on the New York Stock Exchange after trading higher before the bell.

In a letter to GM Chief Executive Rick Wagoner, Tracinda Corp., the investment arm for billionaire investor Kirk Kerkorian, suggested the automaker form a committee to "immediately and fully explore" the possibility of a partnership under which Nissan and Renault would buy a "significant minority interest" in GM.

Kirk Kerkorian, GM's largest single shareholder, owns about 10 percent of GM. His representative, Jerry York, sits on GM's board and the automaker since January has followed a number of his suggestions for a faster turnaround, including executive pay cuts and a reduced dividend.

"We believe that participating in a global partnership-alliance with Renault and Nissan could enable General Motors to realize substantial synergies and cost savings and thereby greatly benefit the company and enhance shareholder value," Tracinda wrote in the letter.

GM, which lost $10.6 billion in 2005, is struggling with high labor costs, sluggish sales of profitable sport utility vehicles amid high gasoline prices and loss of U.S. market share to foreign rivals.

The automaker is in the middle of a sweeping turnaround that includes slashing 30,000 jobs and closing 12 plants.

The letter comes after a quarter in which analysts were growing more optimistic about GM's cost-cutting efforts.

In the letter, filed with the Securities and Exchange Commission, Tracinda said it has been in talks with Carlos Ghosn, CEO of both Renault and Nissan.

Renault, which has a controlling stake in Nissan, declined comment. A Renault spokeswoman said, "We have no comment."

Nissan spokesman Simon Sproule said: "At this stage Nissan would not have a comment."

GM said it has received no offer or proposal from Nissan Motor or Renault to participate in a partnership, but its board will consider the request by Tracinda to explore the possibility of an alliance.

"The Tracinda request will be taken under advisement by the GM board of directors," GM said in a statement.
 

·
get off my lawn
Joined
·
15,507 Posts
visions of chevy encores and pontiac daulphines are dancing in my head.. funny but every car co Renault has hooked up with, has gone under,, Look at AMC,, and now Nissan is in trouble too
 

·
Registered
Joined
·
2,369 Posts
DrDodge said:
visions of chevy encores and pontiac daulphines are dancing in my head.. funny but every car co Renault has hooked up with, has gone under,, Look at AMC,, and now Nissan is in trouble too

Nissan is not in trouble. They are still making great profits and most of the new product doesn't hit the showroom until fall. The problem they have is the fleet was redone at one time. They are selling cars that will be replaced this fall(Maxima,Altima,Sentra).
 
1 - 4 of 4 Posts
Top