GM To Ask for Compensation From Nissan, Renault

Washington DC September 27, 2006; The AIADA newsletter reported that General Motors is prepared to tell Nissan and Renault today that it will require a multibillion-dollar payment from the two automakers in order to agree to a three-way alliance.

GM would ask for the money to compensate for the greater value the automaker believes it would bring to any partnership, reports The Wall Street Journal.

The planned demand likely throws a wrench in the proposed alliance, and shows how far apart both sides are in reaching an agreement.

Renault-Nissan CEO Carlos Ghosn seeks a sweeping alliance which includes his companies taking ownership stakes in GM, but such a deal is unlikely to be offered or, in turn, accepted by GM Chief Rick Wagoner.

Wagoner will face his board of directors on Oct. 3, at which time he will lay out his management's analysis that an alliance would favor Nissan-Renault rather than GM.

A final decision is expected to be made by October 15.