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Discussion Starter · #1 ·
http://news.yahoo.com/s/afp/20060701/bs_afp/usautogmfrancejapan_060701143138

Cliffs:

1.) Big investor individual Kirk Kerkorian proposes GM align with Renault-Nissan.
2.) GM board has emergency meeting with considerations on the issue
3.) Nissan-Renault from informed sources reported by the Kyodo news agency

still this is not even the icing on what could possibly happen but a step forward on something...

hopefully toward an Infiniti FX with an LS7 engine (heh-heh, yeah right).

Clearly GM shares (although rebounding from lows a few months back) is way off the $50+/share years ago. So it might be a good deal if other GM issues slowly fade.
 

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Most of what I've read on this has not met this idea with a great deal of enthusiasm, and some say there is no way Ghosn will take a back seat to Waggoner. Nissan has the VQ and GM has the "high feature" 3.6L V6 with a tad less specific output than the VQ. The alleged synergies aren't readily apparent to me.

Others say it's just another move by Kerkorian to push GM in the direction he wants now that his boy York is on the GM board. Both companies have issues and, as TrueSlide indicated in another thread, many in the automotive world have confused Nissan's financial turnaround with a comprehensive manufacturing and qualitative turnaround. I'm not sure what each company has to offer the other....

Ken.
 

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I don't see what either company gains from this happening. Nissan is doing fine, and with the introduction of the Titan and its 5.6 V8 I don't see Nissan looking to dip into GM's parts bin to help them out with their trucks; as far as sedans are concerned the VQ is a great engine, up until the IS350 came out it was the most potent in that market range, and as far as I'm concerned Japanese 4-cyl engines are still better-built than American 4-cyls.

I don't think GM's problems will be solved going this route.
 

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Discussion Starter · #4 ·
Let me take a crack at this:

*** Motorsports ***
GM has a great presence in Nextel Cup NASCAR and Renault is kicking butt in F1 (the team to beat).

*** Global presence ***
GM is still #1 in the North American market share, albeit waning. GM eclipsed VW as the largest overseas automaker in China (viewed as the ultimate consumer market): http://www.chinadaily.com.cn/english/doc/2005-07/08/content_458546.htm . GM's lead in two huge car markets (two biggest probably soon) is eye candy to companies looking to dominate the world, all on a stock analysts say is capitalized less than Hershey's candy company.

*** Manufacturing ***
>5 of the 10 most efficient plants are GM.

> "Factoring everything together, Harbour Report declared Nissan North America's most efficient automaker. Its plants required 28.46 hours of labor. According to analyst Harbour, that gives the Japanese manufacturer a $300- to $450-per-vehicle cost advantage over less efficient automakers."

http://www.thecarconnection.com/Aut...t_Detroit_Gains_Nissan_Leads.S175.A10479.html

Flexible manufacturing is a big deal these days and although many practise it, Nissan and GM raised the bar in some respects. The Nissan Mississippi plant produces a lot (I'm thinking 8???) of vehicles from one plant and can shift proportions based on demand shifts. Cadillac's flexible manufacturing Lansing Grand River Plant making the CTS, STS, and SRX in one plant is another state-of-the-art heralded plant incorporating and benchmarking rival systems into one.
http://detnews.com/2004/specialreport/0402/22/a14-70492.htm

Synergies? Share the knowledge and apply toward the Asia Pacific Rim market while aiming for Toyota's low defect count lead.

Flexible manufacturing will in turn mean redundancies revealed and further reduction in the headcount for both companies. Lately Nissan's USA magnificent sales growth has come to a screeching halt, so this type of thing may give shareholders some hope instead of thoughts of cashing out.


*** Powertrain ***
GM has Isuzu for diesel tech and rumor has it they recently stole some people from DC's Detroit Diesel division. But meeting EPA2007 and Tier II is really tough, especially cost effectively (particulate filters, NOx control, as well as diesel oxidation catalysts + the high pressure common rail injection system + integrating all this to work in harmony all cost lots of money ). EPA2007's standard will be by far the most stringent globally of standards regarding NOx and soot.

Renault, like Peugeot-Citroen and VW/Audi have leading presences in diesel models and development. So GM could use their help in this department.

Meanwhile Asia and the North America are hybrid crazy and GM/DC/BMW's venture with hybrids are producing the so-called "two-mode hybrid," purported to be a contender against the Toyota THS hybrid system. Nissan-Renault could benefit from this.

The environmental impact of hybrid diesels is on order of non-hybrid fuel cells and just behind hybridized fuel cell vehicles. Cost benefit, turbo-diesel hybrids are far better than fuel cell vehicles.

Still GM has been gung-ho about the way future with fuel cells; and highly publicized too. In fact they've been criticized for being shooting too far in the long-term as they did with many projects like the electric-only EV1. I think Honda and Toyota have more visibility with their fuel cell research than Nissan. So the only way to achieve parity is to partner up with one who has poured gobs of moola here, GM.
-----
Long post = many chances of errors...
 

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Discussion Starter · #5 ·

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STAGED said:
http://money.iwon.com/ht/nw/bus/20060702/hl_bus-t108266.html?PG=home&SEC=news

This news rocketed GM's stock price to nearly $30/share. That's 58% more than GM share prices bit less than 3 months back when it hovered around $19/share. A blue chip stock that rises like a hot small tech company stock.
I'm so glad I picked GM up at $21/share. I started shittin in my pants when it dropped to $18. I kept my sell target at $30/share not knowing they'd get there so fast so now I'll have to re-evaluate.
 

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Eric, I agree with you about the possibilities. I just don't see them as being realistic. Right now, both companies are headed in the wrong direction and no company has ever raced their way into increased market share or quality products, notwithstanding the fact that Renault doesn't even register one bit with the vast majority of the American car buying public. While hybrids and fuel cells hold some promise, it's GM's core line-up that is giving it problems and where the competition is greatest, both from above and below.

I even have my doubts about flexible manufacturing. The only way this can be done is to put most everything on the FM platform like Nissan has and use the same motor, the ubiquitous VQ35. The danger in this, though, is not being able to respond quickly to new offerings by your competitors and have a good number of your vehicles look and perform the same. This can, if not monitored closely, result in cannibalization, as I expect to happen with the release of the new Altima (taking away sales from the Maxima, although neither is an FM platform vehicle, but the point remains).

I'm not saying certain synergies and benefits cannot be realized but, from what I know about both companies, I don't see it as likely. Two completely different corporate cultures and a looming battle to see which one ultimately prevails will be a major distraction, IMO. After all, there are many disaffected Chrysler veterans now working for GM as a result of the DCX "merger", and former and current colleague Bob Lutz, who remember the corporate culture wars within DCX that cost them jobs, careers and major automotive projects. They can't be looking forward to going through the same thing with Ghosn and I don't necessarily see having another voice in the GM boardroom as helpful.

The same benefits predicted by some in this instance were predicted for DCX as well, and I think everyone will agree the jury is still out on that deal, to say nothing of the Mercedes-Mitsubishi disaster. GM's and Delphi's early retirement/employee buy-out programs succeeded beyond their wildest dreams and GM is now saying its employee attrition goals can be met by the end of this calendar year and not sometime in 2008 as was once thought. This, I think, is the way for GM as long as it follows up its cost cutting with product the buying public considers desirable and a good value.

Both GM and Nissan acknowledge they take too long to get new product to the market (R35 GT-R anyone?) and no one, to my knowledge, has addressed how this problem will be ameliorated if such a corporate union were to occur.

Sorry for the longwindedness......tough subject with many complex issues.

Ken.
 

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All they want is shares, as in like 10% each for Nissan and Renault. That won't give them a commanding voice, it just means a cash infusion into an auto giant who is due for a turn around. It doesn't mean VQ powered Impalas, or twin turbo LS7 Skylines are in our future.

If anything it'll just mean sharing technology like hybrid, or diesel - or cooperating in emerging markets like China, Russia, etc...
 

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Discussion Starter · #9 ·
Ken, you're right.

Lots of doubts here.

The possibilities I mentioned are just that...and moreover business benchracing. Of course if anybody knew the real value of this alliance they'd be a millionaire.

I don't know if C&D stated somewhere that excessive platform sharing mentality results in a platform not totally optimised for mass.

Buying GM shares also doesn't shake off their UAW stranglelhold.

You probably have the best analysis around...so thanks!!!

I think Kirk Kerkorian is an impatient sense of urgency type and may see the same impatience in Carlos Ghosan that K.K. feels is needed.
 

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STAGED said:
I think Kirk Kerkorian is an impatient sense of urgency type and may see the same impatience in Carlos Ghosan that K.K. feels is needed.
Eric,

Excellent point as Kerkorian, for sure, needs more help in the boardroom from his perspective and Ghosn would definitely be that guy. I have to believe the success of the early retirement/employee buy-out programs have strenghened Waggoner's hand with the board and taken off some, though certainly not all, the tremendous pressure he's been under. Probably weakened the hand of UAW union leadership as well, which I see as a good thing in GM's effort to reinvent itself.

Thanks, as always, for the kind words.

Ken.
 

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STAGED said:
*** Manufacturing ***
>5 of the 10 most efficient plants are GM.

> "Factoring everything together, Harbour Report declared Nissan North America's most efficient automaker. Its plants required 28.46 hours of labor. According to analyst Harbour, that gives the Japanese manufacturer a $300- to $450-per-vehicle cost advantage over less efficient automakers."
Harbour Report's study is conducted on NA plants only. Nissan also has its share of quality issues.

Anyways this will be interesting. I can imagine both a failure, or a brilliant success w/proper implementation. There is more than enough engineering know-how b/w the two companies to rival Toyota.

But I don't trust Ghosn, I think he is in it for the short-term.
 

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Discussion Starter · #12 · (Edited)
Another troubling recall...

"Nissan faces costly recall
96,800 Altima, Sentra engines will be inspected
Nissan North America could face a hefty price tag to remedy a recall of 96,800 2006 Nissan Altimas and Sentras, which may consume an inordinate amount of oil and cause engine fires."
 

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My call on this? Kirk just wanted to make sure he made a shitload of money on this deal. Period. He does not really care about the future of the company...he only wanted to make lots of dough out of this. He owns 9.9% of the total GM shares...up 50% in a couple of months!? Pretty darn good investment if you ask me...:)

BTW Eric, don't be surprised to see the blue chip stocks in all sectors have good rise over the next 2-3 years. They've been taking a beating and being neglected for the last 5-7 years. They are extremely undervalued right now. ;)

-Olivier
 

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^^^Troubling news for Nissan. Real good news for GM in terms of being able to sell cars without huge incentives, establishing serious sales momentum and keeping inventory down and excellent news for Toyota with the LS 460, LS 500, LS 600h, GS 460, IS 500 coupe and IS 350 convertible yet to come.

Ken.
 

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Discussion Starter · #17 ·
Olivier Caza said:
BTW Eric, don't be surprised to see the blue chip stocks in all sectors have good rise over the next 2-3 years. They've been taking a beating and being neglected for the last 5-7 years. They are extremely undervalued right now. ;)
That's good to know. I need to use this info + others to reapportion my 401k
Eric
 

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STAGED said:
That's good to know. I need to use this info + others to reapportion my 401k
Eric
Gold sector will be good for the next year too. But beware, always do your research beforehand.

I'll forward you some reasearch documents that I have if you want them.

-Olivier
 

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Kirk is the shit! He owns vegas, he owns the automobile world, and he used to own the movie industry! And he's armenian I Vote for him to be president!
 
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