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GM Board Expected to Approve Looking Into Possible Deal

Friday July 7, 2006

According to analysts, a meeting is set to take place today in which GM’s board of directors is said to be likely to approve further talk with Nissan and Renault in regards to their possible future alliance.

However, it is also said that some – like current GM chief executive Rick Wagoner – are expected to argue against such an alliance. This possible turbulence is feared by some, because they see it as something that could be somewhat of a deal-breaker or, at the very least, the source of many boardroom showdown to come.

It goes without saying that this possible alliance is favoured by Kerkorian, GM’s major shareholder, who believes that “If the board disagrees without a study, that wouldn’t be proper due diligence, and Wall Street wouldn’t like it that much.” For this reason, analysts predict that the board will most likely put together a team in order to research the possibility of joining the alliance.

Additional pressure is also being placed on GM CEO, Rick Wagoner, who some say may have to cede control of General Motors to Carlos Ghosn, who has already completed a successful return to profitability plan with both Nissan and Renault.

“This puts more pressure on Rick Wagoner to hasten the turnaround at GM,” said David Kudla, chief executive of Mainstay Capital Management.

During these times of crisis and uncertainty over at GM, ones thing always remains crystal clear: That it’s time for Wagoner to shape-up or ship-out and that during the coming weeks, months, and possibly even years, things are going to be quite interesting in the Motor City.

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