Originally created 07/06/06

GM considers alliance plan



DETROIT - General Motors Corp. said Wednesday that its board of directors will meet by telephone Friday, a week after dissident shareholder Kirk Kerkorian disclosed his efforts to link the company with foreign competitors Renault and Nissan.

GM spokeswoman Toni Simonetti said the meeting was scheduled before Mr. Kerkorian proposed the three-way alliance, but she would not disclose what was on the agenda.

The board met by teleconference last week to discuss Mr. Kerkorian's proposal, and the company issued a statement saying that members would take the plan under advisement.

Normally the board meets the first week of every month, but recently it has been talking more frequently, Ms. Simonetti said.

The possibility of a three-way global auto partnership emerged last week after Mr. Kerkorian, who owns 9.9 percent of GM, said he had approached Carlos Ghosn, the chief executive of both Renault SA of France and Nissan Motor Co. of Japan, about considering adding GM to the Renault-Nissan alliance.

Mr. Kerkorian's investment company, Tracinda Corp., told GM Chairman and CEO Rick Wagoner in a letter that Renault and Nissan are receptive to the idea of including GM in their partnership and purchasing "a significant minority interest" in the automaker.

GM, the nation's largest automaker, lost $10.6 billion last year but made a $445 million profit in the first quarter of 2006.

DaimlerChrysler AG Chairman Dieter Zetsche on Wednesday said he isn't intimidated by the possibility that GM might join the Renault-Nissan alliance.

"We are certainly not afraid," he told reporters.

Mr. Ghosn has a reputation for turning around troubled companies with his record at Nissan, Japan's No. 2 automaker, since being sent in by Renault in 1999. Renault owns a 44.4 percent stake in Nissan, which in turn owns a 15 percent stake in Renault.

He has brought back Nissan from the verge of bankruptcy to record profits and sales growth in markets around the world.

The board of Renault and Nissan on Monday authorized Mr. Ghosn to begin negotiations with GM, if the GM board agrees.

MAJOR GM SHAREHOLDERS


A look at the entities that owned more than 5 percent of General Motors Corp. common stock as of March 31:


- State Street Bank and Trust Co., Boston, 93.37 million shares, 16.5 percent


- Capital Research and Management Co., Los Angeles, 81.12 million shares, 14.3 percent


- Brandes Investment Partners L.P., San Diego, 59.81 million shares, 10.6 percent


- Tracinda Corp., Kirk Kerkorian, Beverly Hills, Calif., 56 million shares, 9.9 percent


- Southeastern Asset Management Inc., Memphis, Tenn., 40.08 million shares, 7.1 percent


- Morgan Stanley, New York, 29.66 million shares, 5.1 percent

Source: GM proxy statement for the annual shareholders' meeting in June



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