The end of Nissan as we know it?
Paul
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SEATTLE POST-INTELLIGENCER
http://seattlepi.nwsource.com/business/1310AP_Japan_Nissan_GM.html
Monday, July 3, 2006 7 Last updated 6:09 a.m. PT
THE ASSOCIATED PRESS
TOKYO -- Nissan Motor Co. on Monday approved opening talks with General
Motors Corp. over a possible alliance, the Japanese automaker said.
Nissan's board of directors met earlier in the day and decided the company
"should proceed with exploratory discussions concerning a potential alliance
with General Motors," Nissan said in a statement.
The talks will be conditional on GM endorsing a proposal by its major
shareholder, Tracinda Corp., that GM join the alliance between Nissan and
its
partner, Renault SA, the statement said.
The announcement came ahead of a Renault board meeting where executives were
expected to discuss the purchase of a significant stake in General Motors
with
Nissan.
Local media reports have said Renault and Nissan could buy up to 20 percent
of outstanding shares in GM. Details of the possible investment plan
surfaced
after billionaire investor and major GM shareholder Kirk Kerkorian proposed
on
Friday that the troubled American carmaker join the Nissan-Renault alliance.
French Finance Minister Thierry Breton said on Europe-1 radio that he had
met
several times over the weekend with the CEO of Renault and Nissan, Carlos
Ghosn, to talk about the possible deal.
If it materializes, the deal would create a huge auto alliance with annual
output exceeding 15 million vehicles and commanding nearly one-quarter of
the
global market share, according to Kyodo. It remains unclear how much the
investment would cost.
GM has been engaged in an extensive turnaround plan in North America amid
declining profits, high labor costs and growing competition from Asian
automakers. The automaker announced plans last year to close 12 plants by
2008 and said
35,000 hourly workers had agreed to retire early or accept a buyout offer.
Nissan shares finished marginally higher Monday, adding 7 yen ($0.06), or
0.56 percent, to 1,257 yen ($10.99) on the Tokyo Stock Exchange.
Renault owns a 44.4 percent stake in Nissan, which in turn owns a 15 percent
stake in Renault.
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