General Motors begins discussion on a possible alliance with Renault and Nissan

General Motors has reportedly begun their meeting to discuss a possible alliance with Nissan Motor and Renault SA. This news helped the company’s stock improve in the share market, as the market is optimistic about the result of this meeting.

Market analyst Rod Lache spoke about this new development: “Ultimately we believe the decision will come down to GM’s board of directors, who will have to decide whether they believe GM’s turnaround strategy has a high probability of working. We have significant doubts, given ongoing market share erosion.”

Market experts however believe that the company would definitely look into the possibility of going into an alliance with the two companies. They are under a lot of pressure from GM’s largest individual shareholder, billionaire investor Kirk Kerkorian.

Kerkorian had a discussion with Carlos Ghosn, who heads both Renault and Nissan and the idea of such an alliance originated there. Kirk believes that Ghosn would be able to turn around GM in its home market helping it get back on track to turn profitable.

The proposed deal would see Nissan and Renault buying up to 20-percent stake in GM. Kirk already owns around 9.9 percent of GM.