Renault Executive Turning Heads at GM
Carlos Ghosn, the French auto executive who charted a successful turnaround at Nissan seven years ago, is one of his industry's hottest commodities. Could he be the man to end one of its longest cold streaks?
For Kirk Kerkorian, it is a question worth exploring. Shares of General Motors (GM) surged Friday after Kerkorian, the company's biggest shareholder, claimed the Renault-Nissan alliance led by Ghosn might consider bringing GM into its fold and buy a minority stake in the world's No. 1 automaker.
In recent trading, GM's stock was up $1.25, or 4.6%, to $28.69, bringing its gain for 2006 to about 25%.
"It is our understanding that Renault S.A. and Nissan Motor Co. are receptive to the concept of including General Motors in their partnership-alliance and purchasing from General Motors a significant minority interest in the company," Kerkorian said in a letter to Rick Wagoner, GM's CEO. A report on CNBC said the stake could be 20% of GM for a price of $3 billion.The letter was registered with the Securities and Exchange Commission in a 13D filing made early Friday. Kerkorian, the Las Vegas billionaire who owns 10% of GM, urged the company to act on the proposal. "The Renault-Nissan partnership-alliance has created tremendous engineering, manufacturing and marketing synergies, resulting in substantial benefits and cost savings to both Renault and Nissan," the letter said. "We believe that participating in a global partnership-alliance with Renault and Nissan could enable General Motors to realize substantial synergies and cost savings and thereby greatly benefit the company and enhance shareholder value. Accordingly, we urge the board of directors to form a committee to immediately and fully explore this opportunity together with management." Nissan, Japan's second-largest automaker, is 44% owned by Renault. CEO Ghosn was credited with keeping Nissan out of bankruptcy when he was installed as its first non-Japanese CEO in 1999. The turnaround could be valuable experience in figuring out what to do with GM.
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