What does the proposed GM/Nissan/Renault venture mean?...How would it effect GM?...What would GM do?

Question

What does the proposed venture with Renault/Nissan do to GM?...How would it effect GM?...Exactly what kind of joint venture is being proposed?...Somebody please explain!

Answer 1

Kirk Kerkorkian, a billionaire investor, owns almost 10% of GM's stock. GM has had severe financial problems recently, their credit is not great, and their stock has gone down. This would help GM to correct this situation (and consequently increase Mr k's investment)

Why he chose Nissan and Renault, I think, is because they are managed by Carlos Ghosn, who has turned a nearly bankrupt Nissan into a profit maker in just a few years. Get him in the mix, and hopefully he can turn GM around too. The proposal is for Nissan and Renault to purchase a small amount of GM stock (10%) which would make them minority stock holders of GM.

All three would stand to gain more purchasing/procurement power. Greater volume of parts orders means they can demand lower prices, demand cost downs and other services (even more so than they do now) from suppliers

Where Nissan and Renault could be hurt is if GM still is not successful (and they own 10% stock in a company that is worth less than what they paid for it). They also could minorly be hurt because their alliance with GM could slightly lower their credit rating.

Where it will be interesting is to see how the 3 work out the competition between them, since GM and Nissan are major competitors for market share in the US, and GM and Renault are major competitors in Europe. Kind of gets complicated when you allign yourself with the competition. The other interesting thing is that Nissan is not union, and GM is VERY union. I am not sure how that will play into it, but it makes it a little more complex.

I think the main effect for any of them would be even cheaper prices on components to make their cars. Hopefully not at the expense of bankrupting any more of their suppliers (i.e. Delphi, Collins and Aikman, etc)

I hope this helps and that I answered your questions-
Time will tell if their merger even gets off the ground

Answer 2

it will mean that the next generation of gm products will have severe electrical problems with the charging and cooling systems, the wipers wont work in the rain or snow [3 flakes will kill it], but the radio will play well until the pink[stecho] battery gives out. why don't they invite looser Volkswagen into the picture as well then when it all falls apart and everyone is broke these crap car companies will no longer exist. i cant wait for the day [anyone want a Chevy "encore" or "alliance" with a gps system that wont work but has a nice radio? such an attractive body style. ugh!!!

Answer 3

the stock holders of Nissan/renault would effectively purchase a large portion of the GM stock, causing the companies to no longer attempt direct competition with eachother.

The most important things to note would be that Nissan (Japanese) and Renault (French) would have better access to GM assetts in terms of contracting factories, warehouses, supply chain, etc.

In simpler terms, GM would be partly owned by a French and Japanese company, while enabling opportunities for all three companies to save money on production.

Answer 4

I'm not exactly sure but I've heard recently that GM has been having money problems. However, I know that the syrian government has ordered power generation engines from GM on a large scale, so I'm not sure if that will keep them in business.

Answer 5

general motors stock is falling rapidly they are really trying to push eco frienddlier vehicle and are really trying to keep up with the new markets but are falling to the foreing invaders it is a sad time for general motors and if they dont re-tool and refit there ways america may see there end and it will be a sad day Be a american Buy american

Answer 6

It may help keep GM from bankruptcy

Answer 7

Dude, give your 10 points to Mary... I have nothing left to say after this answer... Nice answer..... I learnt a few things from it...

Answer 8

the 10 points must go to mary...she said everything I was gonna'.

Answer 9

They wouldn't be able to kill their electric car projects without more people noticing now. :)

Answer 10

is this true