Seems like our old pal Jerry York is back in play. You may remember Mr. York as the turnaround expert, ex-ChryCo exec, rep for aspiring GM owner Kirk “The Lion of Las Vegas” Kerorian and former activist member of GM’s Board of Directors. It’s the penultimate of these which applies here: Captain Kirk’s main man tried to broker a deal between GM and Renault back in the summer of ’06. The merger fell afoul of then-GM CEO “Red Ink” Rick Wagoner, who’s now shivering in hell (albeit without any financial worries). Our sources tell us that Nissan wants to be GM’s Fiat. In other words, it’s looking for the US government to give it a controlling share in GM for no-money-down, putting Carlos “I told you so” Ghosn at the head of the unencumbered GM. I mean GNR (GM – Nissan – Renault). This one makes a lot of sense. Uncle Sam doesn’t [really] want to run GM, and the Fiat deal will [they hope] provide a template for the GM – Nissan thingie. And, lest we forget, the maxim “everything either grows or dies” applies to both GM and Nissan. Hyundai-Kia just passed Nissan for sixth place in the US new car market.
Wild ass rumer is right.. I have always thought that Nissan made a better fit with Chrysler than GM. Chysler being smaller and less competing models. Nissan could take Jeep and par it down to three three models and keep Dodge trucks as their own and use Chryslers minivans,EV’s and dual mode hybrid tech for Nissan/Infiniti. Let the Name Chrysler die. GM/Nissan seems so complicated.
This rumor sounds as if it could have legs, if history provides a good example.
If you recall, Renault-Nissan made a play for GM back in 2006, when Kerkorian was an investor and York was on the GM board. The death of that deal was followed shortly by York’s exit and Kerkorian’s sale of all of his stock. (He’s lucky that he sold it — it was trading in the 20’s in December 2006 when Tracinda announced the big exit from the General’s stock.) This article is pretty good:
http://www.forbes.com/2006/09/28/gm-nissan-renault-biz-man-cz_jm_0927kirk.html
Of if you prefer, there’s Warren Brown’s hysterical take on things at the time. He was obviously opposed to it, which makes it seem like a good idea.
http://www.washingtonpost.com/wp-dyn/content/article/2006/09/29/AR2006092900866.html
I think we’ve reached a point where there will be a small number of large companies overseeing a variety of “brands” that were once the independent auto makers. Rather like all of the large supermarkets are actually divisions of a larger parent company.
Ghosn is not the brightest (Nashville, anyone?), but even he isn’t silly enough to do this. And even if he wanted to, he couldn’t.
Rumour indeed.
I dunno, there might be something to this…interesting to say the least. Imagine a 370z with a nice small-block instead of that tinny-sounding V6. mmmmm.
Plus, seems they need another truck partner. But, if they were smart they’d wait till C11 so they can boot the UAW (yeah right) else suffer the UAW at their current plants. OK, I just talked myself out of it. :)
Makes sense to me… Has to be done in Chapter 11 to clear the liabilities.
Ford would be the only remaining domestic. Chevilac would be foreign….
Go figure…
Nissan has some dark days ahead. They have been pushing heavily subsidized lease deals (while there resale value isn’t awful, it isn’t up to the level of Honda or Toyota) the future of their truck just got washed, and they are practically giving away their SUVs in order to attract buyers (brand new ’09 $45K Armada for $32K anyone?).
Granted, the GT-R, 350Z/370Z and certain Infiniti models are big hits, and the new Maxima deserves more attention than it is getting. However, a few halo models and sports cars can’t hold up the company, and when the true value of all those leases come back in a couple years, there are going to be big bills to pay.
Jerry York has spent the last 20+ years trying to use the capital and/or influence of the movers and shakers inside and outside of the automotive industry to try and take command of a major automaker-any major automaker. He just wants to be put in charge and the older he gets, the further away he is from being an active automotive executive, the less likely that is to happen; yet like the Energizer bunny, he just keeps on going.
Jerry has had a severe case of red-ass for being denied a seat on Chrysler’s BoD in the 90’s and another case of red-ass for being yanked off of the GM BoD after his latest sucker, oops I meant benefactor, Kirk Krikorian withdrew his chips from the GM poker table and Jerry had to once again give up his hopes for ascending to the throne of a car company. In short, he’ll do and say anything to be put in charge, so I would not be the slightest bit surprised if Jerry floated this rumor out there just to get tongues wagging so that once again, Jerry becomes the center of attention…at least for a little while.
Beyond that, I believe that culturally a Nissan-Renault-Ford tie-up would more sense than a tie-up with GM. Ford and Nissan already have a relationship, and GM has a baaaaad taste in it’s mouth today for anything even vaguely associated with FIAT vis-a-vis the possible tie-up of FIAT with Renault-Nissan is still floating around…While not as strong a rumor as FIAT merging with PSA-Citroen, there have been rumblings of PSA-Renault merging together, then joining up with FIAT…again-just rumors.
To me, it seems like a bad idea. GM is too big, loosing too much money, and burdened by too many problems. I suppose Renault’s French Small-Car technology may be helpful, but Americans will not go for another Le Car. However, just because it seems like a bad idea to me, I think that it may have a shot. Since this Fiat deal came off looking so good for Barack’s Boyz, a Renault-Nissan may be the kind of PR thing that Obama wants.
“…this Fiat deal came off looking so good for Barack’s Boyz…”
Oh yeah? I can’t see the clean end on this turd.
@ fincar1
I was not referring to how you (or readers of TTAC for that matter) see the deal. Just how the MSM and the American Public seem (IMO) to view what Obama did. I was not talking about my personal opinion of what happened (which I don’t agree with in the first place, so it’s a moot point)
I can’t imagine why this would be a good idea. There is nothing at GM that compliments Renault/Nissan except the trucks. They overlap markets everywhere, and Nissan does almost everything better than GM already.
Ahh, What a deal, Made in Europe no doubt eh! GM could do worse and end up in China, so why not this gig? Time will tell I expect.
dwford
Except the trucks? Most profit per unit of any mainstream vehicle sold in the U.S. And one could argue (and then duck) that the Silverado/Sierra are GM’s only true class-leading products, in a market where there are two main players and everyone else.
Remember: Nissan and The Dodge Boys were headed for the altar at one point.
I actually thought the other day about playing the “what if” game with GM/Nissan/Renault.
What if GM had taken up Renault/Nissan on their “alliance” offer a few years back? Could the synergies and cost savings have prevented from GM going (in 28 days) into bankruptcy? Would the one successful auto merger have continued success with a third partner? Maybe we’ll still get a chance to find out…
It appears to me that as a business enterprise this may make sense. Nissan-Renault is essentially organized as an automotive holding company already. They have fared better than most at merging two large automotive companies (see MB-Chrysler for alternate case), and they have sufficient size to absorb and cull their combined ranges.
This is good for US political reasons because all the hard decisions about plant closures, model reductions, etc stop getting made by old boy Detroit insiders and at-risk politicians, and start being made by businessmen in France and Japan.
As far as product goes, the VQ V-6 is one fine engine and would be an improvement over anything GM has in a mid size V-6. Being able to upgrade a Z with the Corvette engine could also be sweet. In much of the product range Nissan is strong where GM is weak (pretty much anything front wheel drive) and GM is strong where Nissan is weak (trucks).
Who else might do this deal? VW is also organized in a way to pull it off and the US is their weak market so they get a double gain. Hyundai? Random Chinese holding company?
This all needs to happen in Ch 11 and business people need to wind down/trim GM, not the courts or US government. It will take some deep pockets and absorbing of short term losses.
Robert – Except that the Silverado/Sierra aren’t class leading, they sell well, but the F150 is still the benchmark in that segment.
If I were to pick GMs most competitive product right now it would be the Lambda platform large CUVs. The Acadia and Enclave look good inside and out, get class competitive fuel economy, are practical, and are as fun to drive as anything else in the segment.
Is a Hyundai-GM merger not the most natural? Their product line seems near perfect for GM to me…
“Imagine a 370z with a nice small-block instead of that tinny-sounding V6. mmmmm.”
That would be a Corvette you are thinking of.
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Dilip Hiro writes:
In the midst of the worst economic crisis since the Great Depression, a new world order is emerging — with its center gravitating towards China. The statistics speak for themselves. The International Monetary Fund (IMF) predicts the world’s gross domestic product (GDP) will shrink by an alarming 1.3% this year. Yet, defying this global trend, China expects an annual economic growth rate of 6.5% to 8.5%. During the first quarter of 2009, the world’s leading stock markets combined fell by 4.5%. In contrast, the Shanghai stock exchange index leapt by a whopping 38%. In March, car sales in China hit a record 1.1 million, surpassing the U.S. for the third month in a row.
“Despite its severe impact on China’s economy,” said Chinese President Hu Jintao, “the current financial crisis also creates opportunity for the country.” It can be argued that the present fiscal tsunami has, in fact, provided China with a chance to discard its pioneering reformer’s leading guideline. “Hide your capability and bide your time” was the way former head of the Communist Party Deng Xiaoping once put it. No longer.
Recognizing that its time has indeed come, Beijing has decided to play an active, interventionist role in the international financial arena. Backed by China’s $2 trillion in foreign exchange reserves, its industrialists have gone on a global buying spree in Africa and Latin America, as well as in neighboring Russia and Kazakhstan, to lock up future energy supplies for its ravenous economy. At home, the government is investing heavily not only in major infrastructure, but also in its much neglected social safety net, its health care system, and long overlooked rural development projects — partly to bridge the increasingly wide gap between rural and urban living standards.
===
We should probably look at what China is buying, directly or by proxy. Geely just spent some time touring Swedish points of interest …
I think it is a great idea. Ghosn has at least as much credibility as Marchionne. Renault is a much bigger player than Fiat.
If BO is jake with setting European companies up in the US in order to compete with the incumbents, well, what could possibly go wrong.
If the government is going to do something stupid, and so much of what they do is profoundly stupid, then they should do something so spectacularly stupid and so obviously doomed to fail, that when it does fail, everyone will have learned a lesson.
“Example is the school of mankind, and they will learn at no other.”
Edmund Burke
Ghosn has to do something, Marchionne is breathing down his neck HARD!
“Renault is a much bigger player than Fiat.
Actually Fiat is about the same size at Renault in terms of production volume, and pushing twice Renault’s size in terms of revenue. More importantly Fiat is profitable.
Firstly, Japanese government will never allow Nissan to purchase Gm or Chryler, or any other US car manufacturer. Period.
And Nissan_Renault alliance was made because Nissan was intereseted in diesels and because Renault manufactures trucks on so does Nissan only in other segments.By the way Renault uses their own platforms,so Nissan could approach them with some interest.What tangible things would Nissan get from Gm? Nissan needs nothing from any US car maker. They have GT_R, Maxima, Altima and Quest, and a good diversity of quality products in other segments.They will never allow to screw up their expertize in infiniti by allowing some Gm to eat their budget and platforms.When Chrysler wanted an alliance with nissan, it was not an alliance actually it was a desperate act of a superprimitve company that has been starved of domestic engineering and real products,and was ready to go under any company to suck out some platforms, or get anyone capable of building for Chrysler a real car! Chrysler is like a cheap hooker selling for 4 bucks but noone wants them.Even russian Gaz, that can`t assemble 2 bolts together, didn`t want Chrysler alliance.
Nissan is a very strong player, and a Japanese company is proud enough to build their own cars and floorpans, not like a hooker to wander around and begging for` alliances`.
@ Detroit Todd
Detroit anyone?
Kirk (Count) Kerkorian = A skin-covered version of the Grim Reaper
I think this will definitely happen. It makes too little sense not to. Imagine adding 2 more brands into the GM fold after they eliminate 4, rebadging GM’s light duty trucks as Nissans to compete with themselves, selling tiny overpriced French cars instead of German ones, and putting an egomaniacal beancounter in charge of the whole thing!
Robert Farago:
“Remember: Nissan and The Dodge Boys were headed for the altar at one point.”
http://www.allpar.com/news/index.php/2009/05/nissan-to-review-chrysler-agreement/
Nissan to review Chrysler agreement
May 1st, 2009
by Bill Cawthon
Nissan Motor Company has announced it will be reviewing its vehicle supply agreement with Chrysler LLC. The announcement comes a day after the American automaker filed for bankruptcy protection and finalized an alliance agreement with Fiat SpA.
The 2008 agreement covered the production of a small car for Chrysler in exchange for a new full-size pickup to replace the slow-selling Nissan Titan.
In February, Nissan said it was revisiting the benefits of the agreement after light vehicle sales plunged, requiring production and staffing cuts.
Mitsubishi will also discontinue buying the Raider pickup from Chrysler after the 2010 model year. However, this decision was based on slow sales.
“Carlos ‘I told you so’ Ghosn at the head of the unencumbered GM. I mean GNR (GM – Nissan – Renault)”
I’m sorry Robert, but anything called GNR can only be headed by Axl Rose. Now that he’s finished “Chinese Democracy”, I’m sure he’s looking for a new project to start. Plus, Axl is a self deluded prima donna convinced of his own genius. Clearly, he’s GM management material.
The Treasury can help merge the two GNR (GM – Nissan – Renault and Guns N’ Roses) by providing the money to sponsor a world tour. Sure, Slash will hold out for more money just like non-TARP debt holders, but I bet Timothy Geithner would totally be a roady for the new group. Think of it as a car show meets hair band concert tour paid for with your tax dollars!
Just think of the tour decals on the special edition GNR Aveos! Sweet!
God I hope this happens if nothing else it will give the “where do the profits go” people coniption fits in twisting logic that buying a car made in the US by Toyota is somehow worse than buying a Mexican made GM vehicle.