Renault and Nissan would talk with General Motors

Renault and Nissan would talk with General Motors

The boards of directors of Nissan and Renault have discussed the issue and have now announced that they would now hold “exploratory discussions” with General Motors. The three companies can form a global alliance to develop automobiles and such an alliance can save money for all the three involved companies.

This announcement has further added pressure on the GM, which is struggling to compete against Japanese automakers in their domestic market. The company is closing plants and firing employees to cut costs.

GM’s problems started when investor Kirk Kerkorian came out with a proposal asking GM to form a committee to consider joining the Nissan-Renault alliance to cut costs and boost GM’s share price. The company responded by saying that they would consider such a possibility.

Market analysts on their part have said that the move would not benefit GM as much as expected and they are not convinced that GM would indeed go ahead with such a move. Kirk on his part has invested a lot of money and effort in the company and wants to get it on track to become profitable again.