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Does Global Motors make sense?

07/04/2006, 11:07 AM

By admin

Forbes columnist Jerry Flint has published his thoughts on the possible Renault-Nissan-GM tie-up. Borrowing a term coined years ago by Lee Iacocca, Flint asks if a “Global Motors” really makes sense. “So whose plants get closed? Shut German GM plants and supply that market with French-made Opels? Close Michigan plants and supply dealers with Nissans made in Tennessee but badged as Chevys? Lay off the engineering staffs where? France? The U.S., Japan? Which dealerships get combined or closed? [...] Sometimes these conglomerations work–and sometimes they don’t.” He also wonders if GM would really be ready for the massive shakeup it would receive. “If Carlos Ghosn becomes part of GM, don’t expect him to play as a bit actor–for long. He doesn’t think much of GM’s American management. [...] So Ghosn would demand massive changes and fast, and the world would expect him to be calling the shots, not the Detroit managers.”

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07/04, 11:28 AM

posted by:

Madcapp

That merger would be a collossal mistake…therefore its perfect for GM. Merging with Renault makes as much sense as looking for new senior management in Zimbabwe or Uganda.

07/04, 11:41 AM

posted by:

J

It’s crazy enough that it just might work . . .

07/04, 11:42 AM

posted by:

Jim in LA

any idea from kerkorian is a HUGE mistake. remember: he’s in this for one thing – his personal enrichment. his entire career is built on dismantling companies to pocket the proceeds from dissolution.

GM has to survive on its own. we do NOT want to continue this conglomeration era, where we’re going to end up with less competition, poorer quality and higher prices. because that IS what is coming, if corporations in all sectors continue to merge.

there used to be a thing called anti-trust in this country – in fact, we pioneered it.

it’s time we brought it back and stopped thinking that what’s good for corporations is good for us all.

look around – clearly, that is not the case. and it won’t be for GM, either.

07/04, 11:46 AM

posted by:

Don

This is history repeating. Renault paired up with AMC in the 1970s with disasterous results for both companies. Renault had to leave the U.S. market to recoup its losses and AMC ended up getting sold to Chrysler. This situation doesn’t look any different.

07/04, 11:55 AM

posted by:

James

GMs business structure and management system is definitely a mess. A merger would be good in changing how GM does business. They need to stop being the stumbling giant that’s slow and inefficient. Nissan is also the most efficient car manufacturer in the US which would be good for GM to lower the cost per vehicle. It sounds like everyone is scared of a change, but if GM doesn’t change it won’t survive.

07/04, 12:01 PM

posted by:

Wickedated

The reason why GM is struggling is part management but HUGELY product quality. Car sales are the only thing that moves a car company. GM struggles with sales because of POOR QUALITY and ****TY DESIGNS. The new Camaro is late by a year already, Chrysler already green lighted the Challenger, and when the new Camaro gets out, it better not have problems such as the roof flying off (Corvette). The solution is simple- better looking vehicles with attention payed to quality and reliability. You can merge all you want, if nothing changes on the product front, nothing will change with the company’s profitability.

07/04, 12:22 PM

posted by:

Bryan Detty

I highly Doubt that this will happen. This will only be good for Renault/Nissan and Kerkorian.

07/04, 12:25 PM

posted by:

Thing2

I’d be very cautious as Renault and Nissan could be carrying huge amounts of hidden debt and that combined with GM’s debt could put all the companies too far back into the hole.

Like what #3 was saying, this move makes you look for the real agenda behind all this.

07/04, 1:20 PM

posted by:

Bryan Detty

The real adgenda to be that much closer for Kerkorian to break up GM.

07/04, 2:42 PM

posted by:

aznstuart

Would the merger make help GM keep its crown as the world’s largest automaker?

Like the article says, what will have to go in the event of the merger? Will GM kill more brands? Will there be cloning between Nissan and GM? If it will create unnecessary models such as the Titan, Silverado, and Sierra being all the same, I would be against it. But if they stay true to their own models and maybe just share transmissions and engines, I would say it would be profitable. Nissan isn’t that great on reliability but Carlos could really help GM in its turnaround.

07/04, 2:46 PM

posted by:

1c3d0g

Ugh…God spare GM if they merge. Renault? Nissan? Gimme a break!

07/04, 2:47 PM

posted by:

Ke

American’s ugly anti-french head is popping up again.

07/04, 3:02 PM

posted by:

BB

I’m a huge fan of Carlos Ghosn and what he’s done to Nissan. Indeed he’s listed by many media outlets as the top player in the automotive industry, and Ford and GM both wanted to lure him away to their camps. But he needs to finish is mission in fixing Renault first then take on other projects. I would love to see Ghosn tear up and fix GM but the integrating it into Renault-Nissan would not make sense. As much as I detest GM, they are showing some signs of being promise so it would be interesting to see if they make it on their own.

07/04, 3:39 PM

posted by:

stuart

COMMENT TWELVE – SPOT ON

07/04, 9:29 PM

posted by:

Madcapp

No, 12 isn’t spot on, in fact 12 isn’t anywhere close. There’s a lot of wonderful stuff from France, like Dom Perignon, Triangle Electroacoustique, Facom tools, Music groups like “Air”…but you know what, Renault just isn’t one of them. The problem is that there is no place in the US auto market, or really worldwide where Renault fits in. The Japanese own the compact commuter car and hybrid market, and the Germans own the premium segment. #4 discussion about AMC and Renaluts prior US presence is the reality.

07/04, 10:36 PM

posted by:

Tristan

Wouldn’t this make “Global Motors” like the biggest single company or Corp or w/e on the planet?

07/05, 3:44 AM

posted by:

Darien

GM is the ‘crack-dealer’ that is driving America to ruin. This merger would be fantastic as GM would stop making the huge, ugly, gas-guzzling SUVs. Instead, it would make beautiful cars thanks to the design talent of Renault and also fuel efficient thanks to Nissan. GM MUST go so America can survive

07/05, 5:12 AM

posted by:

The Jedi

Ok first GM needs not to make a alliance or what ever ya wanna call it ole kirk wants to make a bundle..thats all he wants….he wants to raise his stock then sell it….he tried to sell it to toyota a few years ago….I like GM and being # 1 makes you a prime target….this is not an allaince this is a corporate raid…if I was GM boards I’d buy his stock back before this guy kills the company…he doesn’t even own drive or use a $%* gm product….he’s gonna get 10’s of more thousand of u.s worked fired…and ole boy who runs nissan is a hatchet man from hell think the UAW is in trouble now let that asshole get hold of the company….and lets not even talk about the french in the mix….Kirk is a crook….better buy him out he just wants more money thats it..Kerkorian is bad news….my god this man sued benz cause he felt the stock prices didn’t go high enough….he’s worth 4 to 5 billion bucks damn how much more does he need…build and elctric hybrid hummer and Gm will own the world

07/05, 5:15 AM

posted by:

The Jedi

Oh yeah he tried to chrysler…and as far as being a fan I live in japan..trust me he aint loved here…he’s a bully and nissan is getting it’s ass handed to it by toyota everyday in japan….don’t trust all the hype you hear about this guy..

07/05, 6:05 AM

posted by:

Ihateproton

isnt GM ‘Global’ enough?
they have Opel/Vauxhall/Saab in Europe, Daewoo in Korea, Holden in Australia, ties with Isuzu and Suzuki in Japan.. and with all this how is Renault and Nissan gonna help?

i think what they really need is Carlos Ghosn in place of Rick Wagoner

07/05, 6:59 AM

posted by:

Veda

Jedi’s comments are correct. In fact, it’s not just Japan but everywhere else in the world with the exception of 1-2 models, Toyota beats Nissan everytime. Ghosn is hyped and who knows how long he can go with the cost saving programs. People would start to want real quality not pure performance.

07/05, 9:20 AM

posted by:

Georgina W Bushy

How non-comittal is that statement? We’ll look into it if GM’s board will look into it yawn. This alliance makes no sense to anyone involved except Renault who has no presence in the Americas at all

07/05, 1:11 PM

posted by:

Piablo

This whole mess sounds like it’s rooted in accounting misdealings. The whole thing sounds like a scheme to hide accountability and further confuse customers. The oil industry is able continue as it has because the whole process of getting oil to the pump is confusing to most people. Selling a rebadging and selling a competitor’s car is about as anti-capitalist as it gets! If it sounds fishy, looks fishy, and smells fishy, then it’s probably fishy.

07/05, 1:32 PM

posted by:

Craig Mitchell

American cars are mostly rubish anyway, so build quality isnt an issue.

GM has sooo much debt that it would probably be quite cheap to purchase as would Ford.

Expect big changes if it does happen, the French and Japanese dont care much for Americans.

07/05, 2:57 PM

posted by:

Piablo

Let me add something to my previous post… I commented in another story about the Chinese cars and my point there may be relevant here too.
The one thing that makes Detroit competitive price-wise, ($$ only, not quality, design, etc…) is tariffs. The US charges other companies like Toyota, honda, and Nissan thousands of $ per vehicle so that American cars can have a chance at the same price point. GM, Ford, and Dodge cannot manufacture a vehicle at the same low cost as its competitors. So if GM purchases a Nissan, rebadges it for less than that of what the normal tariff would be for Nissan, then maybe there is a profit to be made for the two of them. That is IF and only if the US government would allow such a scheme to occur.

07/05, 4:27 PM

posted by:

Jae

Jedi, Veda,
For the record Toyota is beating everyone right now. GM is number 1 in America but Toyota is Number 1 in the world by volume.

IMO a merger could work but ALOT of people will get burned before it actually shows a profit. Nissan and Saab would probably lose in the deal as they are the marques that would be directly competing against the establishement (Chevy/Pontiac for Nissan in America, Saab vs Renault in Europe) .Not to mention Vauxhaul (sp?) and Opel. Where do they go? Maybe Saab could go further upmarket but they have very little pull here in America, hard to beleive that they could really break into premium luxury territory with out some major money behind them.

I think GM is on the right track. The buyout is going to work faster than expected. Hopefully they can clean their crap up and rehire those guys that got bought out under a new contract that removes the $1500-per-vehicle-excise-tax-laden-on-top-of-the-cost-to-manufacture.

Also, I agree that this ploy is about nothing, more than lining some fat cat’s pockets with more shareholder money. That’s good for shareholders but does the average worker/consumer no service.

Craig,

GM is long from done in the game so counting them out is rubbish. But, not looking at all possibilities, even those outside of the box, is rubbish too.

07/05, 4:30 PM

posted by:

Jae

Craig,
I meant to say that the buyout program is removing that debt very fast. GM should be back to full profit by January 2007 so they are not going to be as cheap as you may think.

07/05, 10:56 PM

posted by:

stuart

I know they will be even cheaper

07/07, 1:51 AM

posted by:

doug

might as well give it a shot, IMO Carlos is the only guy who can save GM

 
 
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