A Worthy Trio Combo?

Thinking about the US auto market (GM, Ford & Chrysler), everything is showing Thumbs down - Unhealthy, Cost Cutting, Factories Closing, Bankruptcy, Employees shown the door and voluntarily retiring. But, the Toyotas' prospects don't look too bleak, in fact they are more in the booming end, with expansions all over the world in various countries. GM though is still the market giant with 14.2% market share, Toyota is not behind either with 13.8% and the slope is negative and positive respectively! Not a good sign for GM because Toyota is capturing more & more of US market.

So, out came Kirk Kekorian of Trancinda Corp, the largest invesotor of GM with a suggestion of working out a deal with Renault-Nissan which will make a global combo market share of more than 23%! Both companies' board members have agreed for the talks and both the CEOs GM's Rick Wagoner and Renault's Carlos Ghosn will meet! Those names have big time history behind them, especially Ghosn, the man who brought Nissan from near bankruptcy in 1999 to six straight years of profit & revenues. Even Wagoner is trying to do the same but constrained by pressure from investors, board members, share holders, union labors and employees expecting retirement benefits!

From my perspective, here are all the questions, concerns, assumptions and issues...

• What amount of stake will Nissan & Renault take from GM seperately? May be 10% each. Does that mean, Ghosn will have an upper hand in all decision making?
  
• Is it possible that Ghosn will replace Wagoner? May be handling 3 big companies under one hand is not a possibility. Also, this is just an alliance and not a merger. Not a MBA case study!
  
• Is GM really in need to such a cash inflow from Nissan-Renault? Or is GM really looking for resolving other internal conflicts and issues?
• Nissan has also been pushing for cost cutting all these times and this alliance can be like gift. Because, all those idle GM resources and capacities can be used for Nissan's production.
• But the problem here in US is Nissan is too a big time competitor for GM. So, how much can they blend? May be, promote Nissan's advantages on their sedans compared to GM's while take GM's lead in trucks and heavier vehicles.
• While Renault has no presence in US, they are a competitor for GM in Europe. I'm not sure if GM can gain something big but there is this big chance of opening up the US market for Renault.
• No idea if this alliance will make some change in GM's downtrend, but for sure the other side will gain a lot from GM's - Supplier base of parts & basic raws(plastics, steel, aluminium), more bargain/negotiating power with suppliers, hybrid & ethanol based fuel technology and ofcourse, the huge distribution and marketing base!

On a broader global perspective, this sure is a welcoming move because US, Europe & Asia auto makers are joining hands as one:)