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Tuesday, September 26, 2006

Carlos Ghosn Gets Desparate: GM, Ford, And Renault

Stocks: (F)(GM)(TM)

Carlos Ghosn is sending out all sorts of messages that talk with GM are progressing but the big US car company does not understand that it will be crushed by Toyota. Ghosn clearly wants to push GM and its board by talking to the press about the lack of progress in his talks with GM to create a global alliance with Renault and Nissan, two companies that Mr. Ghosn runs.

But, there may be more pressure on Mr. Ghosn than there is on GM. Renault has done fairly well in the market. It stock is down slightly from early summer, but has still done well over the last year. Nissan is another matter. Its stock is down from its early summer highs, and Toyota may be a real threat to the company.

In Japan, Nissan's home market, its sales were down 12.8% for the first seven months of 2006. Toyota's sales were flat in Japan for the period.

GM, on the other hand, has been able to take $9 billion in annual costs out of the company, and investors are convinced the the large US auto company has at least a fighting chance of being competitive in its home market. The market has voted in that direction, driving GM's shares up from a 52-week low of $18.33 to $30.60, fairly close to its annual high.

Ghosn is talking, but it appears that no one at GM is listening.

Douglas A. McIntyre can be reached at He does not own securities in companies that he writes about.

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