What's All the Rucus about GM and Nissan-Renault

Oh the humanity! Oh the horror!! A Japanese and American automaker merging, how could this happen?? Well, I suppose we don't have to worry too much yet, considering a decision hasn't even been made yet. But still, imagine the repercussions. Why would two automakers in the top 10 worldwide want to join forces?

Well, that's a great question. GM is in a downward spiral and it needs something or someone to help it out of the doldrums. They see Nissan/Renault as a great option. Head of Tracinda Corp. (who holds a 9.9% stake in GM) Kerk Kerkorian has introduced this thinking to help GM revamp it's car lineup and it's company profile. He proposes that Nissan/Renault alliance take a minority stake in GM, which would translate into in deapth technology sharing throughout the group. Carlos Ghosn, CEO of both Renault and Nissan, says that he would not support simple badge engineering (a practice widely spread throughout GM's brands). He would be very interested though in a wealth of technology sharing such as using the hybrid system GM has developed with BMW and DCX or allowing GM to utilize the power and efficiency of Nissan's famed VQ-V6 used in everything from the Nissan Altima to the Infiniti M35.

There is still much to overcome before a deal is even struck. While this kind of cooperation could greatly benefit both sides, it would not rectify some of GM's biggest problems, namely its issues with the UAW and it workers costs (health insurance, pensions, etc). Ghosn has also made it clear that regardless of the rumors, he will not take over as head of GM is the deal were to go through. And even though the heart of GM (the city of Detroit) is behind the merger (56% think it would be beneficial), there have been many mergers that seem ominously similar. Just recently, GM was forced to pay Fiat over $2 billion after it pulled out of their alliance. But company execs are confident this could help both companies and have started a 90-day project to research the benefits and losses of the alliance. For now, we can only wait.

What is your opinion? Do you think GM is going down inflames anyways and should not drag Nissan with it? Or do you think this could be GM's saving grace?