Saturday, November 8, 2008

GM-Chrysler Move Frees Ghosn to Focus on Renault, Nissan Woes

By Laurence Frost and Naoko Fujimura
Nov. 7 (Bloomberg) -- Carlos Ghosn should focus on managing Renault SA and Nissan Motor Co. through the worst auto-market slump in years as merger talks between General Motors Corp. and Chrysler LLC hamper his quest for a U.S. partner, investors say.

``Ghosn needs to concentrate on his companies now, because they're both suffering,'' said Koichi Ogawa, who helps manage $28 billion at Tokyo-based Daiwa SB Investments Ltd. Nissan and France's Renault should tighten the screws at home rather than invest abroad as the credit crisis ``pushes the global economy toward recession,'' he said.

GM, considered a potential partner by Ghosn even after the biggest U.S. automaker rebuffed his last approach in 2006, has held talks over a possible government-funded combination with Chrysler, which had been increasing cooperation with Nissan. The Tokyo-based company and Renault, both led by the 54-year-old chief executive officer, aren't likely to offer a better alternative.

Nissan slashed its full-year profit forecast by more than half on Oct. 31 after global auto markets plummeted. Renault had already cut its guidance, in part because Nissan won't contribute as much to profit as the automakers expected. The pair's struggles, reflected in industry-leading stock declines, may thwart Ghosn's U.S. ambitions.....more

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