Alignment with Nissan Uncertainty Universal fate affects the global automotive industry

Detroit, the US “automobile city,” began routinely shutting down in summer on the 3rd, but General Motors’ headquarters is now even more busy. For reporters' telephone interviews, General Speaking Officer Gina Troya's answer may be the same as for other incoming calls: I'm sorry, but there is no new news at the moment. The board of directors is seriously considering the alliance proposal.

GM's major shareholder Kirk Kirkian suggested on the 30th that GM join the Nissan-Reynolds Alliance. Industry observers believe that if the parties eventually form an alliance, the existing structure of the world automobile industry may be broken. Detroit's sensitive nerves have apparently been touched. when
Local newspapers reported on the front page in headlines for several days. "The New York Times" said that such a big headline "is usually used only when the war is announced."

GM's Big Shareholder's "Bomb"

According to informed sources, on the day that Kirkian put forward the proposal, the GM board of directors held an emergency meeting, and on the 7th, it will hold another meeting to discuss the alliance. The GM board's "emergency move" shows the importance of this proposal. The Detroit Free Press commented that this was a "bomb" that Kirkion had thrown.

As the largest company in the world’s auto industry, GM’s production and sales volume is still unparalleled, but its sales performance and stock price performance have already fallen behind its peers in Europe and Japan. Nissan and Renault have joined each other and have now become a consortium. Carlos Ghosn, known as the "Car Tsar", raised the company's operating performance to a new height while serving as CEOs of both companies. Reynolds and Nissan’s share price have tripled in the past seven years; GM’s share price has shrunk by 60%.

The shrewd Kekelian obviously can not tolerate the fall of GM. Therefore, he proposed to the GM board that Renault and Japan should invest 3 billion U.S. dollars to hold a 20% stake in GM. Some analysts pointed out that once the alliance is successful, three companies can integrate production, R&D, and save large expenses, and GM can also gradually get out of the current predicament.

Two characters "power game"

Perhaps aware of the dissatisfaction of the outside world and the instability of his position, Rick Wagoner, CEO of General Motors, has undergone drastic reforms in recent months. However, this unexpected alliance proposal has broken GM's original revitalization plan and may trigger high-level personnel changes.

In the words of Detroit Media, this game is a “power game”. On both sides of the game is Kekerian, an investor who has been extremely dissatisfied with management, while on the other side is Wagner, who is in dire straits but still has something to do. .

Steinmetz, an automotive industry analyst at Morgan Stanley, said that although there is still confidence in Wagoner, GM's board of directors and shareholders are unwilling to remain indifferent given Ghosn's operating results. Some sources told reporters that some directors have tended to allow Ghosn to take over GM.

Concerns about the alliance between three manufacturers

Analysts pointed out that there are not many precedents for successful mergers and acquisitions in the automotive industry. GM has also ambitiously annexed Italian car companies such as Fiat. However, the dream of the automobile empire did not finally materialize, and the financial deterioration of the subsidiary weighed on GM itself. The bitter memories of the alliance made the GM board to be careful. At the same time, some Renault and Nissan investors do not think this is a profitable deal. The French media has begun to worry that Renault may be marginalized once Ghosn’s business focus shifts to GM.

Swiss bank analyst Hilcliffe said in a report that the original Renault and Nissan markets basically did not coincide, Nissan mainly in Japan and North America, Renault business is concentrated in Europe, but now universal business around the world. He said: "This will bring more trouble. There are mutual competition within the new consortium. GM already has many brands. If Nissan joins in, the problem will be more complicated."

The prelude to the changes in the industrial structure?

A GM spokesman told the reporter whether the alliance may not wait until the company’s board of directors on the 7th, or even to the shareholders’ meeting next year. However, analysts pointed out that this incident may open the prelude to the era of global auto industry.

Ghosn has long announced that he is considering moving forward with the Nissan-Renault alliance to allow more automakers to join, not GM or other manufacturers. From a general perspective, alliances may be an indispensable aid to help them obtain various resources to escape from the predicament. In accordance with the idea of ​​Kekelian, even if not Nissan and Renault, he will promote GM to consider other affiliate programs, Toyota, Honda, BMW are possible partners.

Analysts believe that if the tripartite alliance is successful, GM competitors Ford, Toyota, Honda, and DaimlerChrysler will face tremendous pressure and they may form a similar consortium. In a recent report, JP Morgan stated: "The auto industry will see more alliances in the next two to three years, and a large number of affiliates will be smaller companies, but it will include General Europe, Ford Europe, Peugeot. - Citroen and even BMW are likely to join in."