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Thursday, October 05, 2006

Nissan Investors Wanted Nothing Of GM

When Carlos Ghosn was forcing the issue of creating a three-way alliance with two companies he runs, Nissan and Renault, and GM, his shareholders were lamenting the move. As the talks collapsed, shares in both of Mr. Ghosn's companies moved up. Nissan's shares popped almost 3.5%.

Mr. Ghosn and his ally Kirk Kerkorian were freelancing. Nissan's shares have done poorly since May with the company's market share dropping in Japan. Renault's shares have been down, but less so.

The idea of a three-way production and marketing alliance is unually complex. Both Ford and GM have own parts of car companies in Japan and Europe, and the results have rarely been good. The Ford purchase of Jaquar, one example, has been a disaster.

Then, there was the question of whether Mr. Ghosn could be three places at one time: Tokyo, France and Detroit. Howard Stringer of Sony has been trying that system, and it does not seem to work well, at least for shareholders. It raises the question of how Nissan and Renault shareholders will react if Mr. Ghosn attempts to forge a deal with Ford. The No.2 US car maker is in much worse shape than GM, and would, one might think, take more of Mr. Ghosn's time.

Each of the large car companies, with the possible exceptions of Toyota and Honda, have enough trouble in their home markets that they do not need to go wandering abroad.

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

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