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Wednesday, September 27, 2006

GM: Render Unto Caesar...

Stocks: (F)(GM)

And, so it goes. With Renault and Nissan more anxious to build a three-way partnership with GM than GM is, the big American car company has asked for a multi-billion cash compensation based on the fact that the North America partner brings more to the table than the Japanese or European ones do.

With Nissan losing share in its own home market of Japan and Renault without a dealer network to sell cars in the US, GM is probably right.

Carlos Ghosn, head of Renault and Nissan, waited to long to press the GM board. GM has now taken $9 billion a year out of its annual costs, and its stock is up almost 60% this year. GM's business is also growing quickly in markets like Russia. The company's market share was also up in August in the US market.

With GM demanding tribute in exchange for forming a partnership, it is time for Nissan and Renault to catch a cab across town to Ford. If they have cabs in Detroit.

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

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