GM/Nissan/Renault merger in the works!

[Global Warming]

NEW YORK - One of the largest investors in General Motors Corp. on Friday urged the world’s largest automaker to consider a three-way partnership with Nissan Motor Corp. and Renault, sending shares of GM up sharply.

The proposed move by billionaire investor Kirk Kerkorian’s investment company would likely include Nissan and Renault taking significant stake in GM, which has been burdened by high labor and pensions costs.

The automaker is in the middle of a sweeping turnaround that includes slashing 30,000 jobs and closing 12 plants.

The letter from Kerkorian’s investment company, Tracinda Corp., said the company believes Renault and Nissan are receptive to the idea of a partnership and purchasing “a significant minority interest” in the Detroit automaker.

GM responded by saying it has received no offer or proposal from Nissan or Renault to participate in a partnership, but its board will consider the request by Tracinda Corp. to explore the possibility of an alliance.

Renault, which has a controlling stake in Nissan, declined comment.

Tracinda, which owns about 10 percent of GM, said the existing French-Japanese partnership has created “tremendous engineering, manufacturing and marketing synergies, resulting in substantial benefits and cost savings to both Renault and Nissan.”

Tracinda urged GM’s board to form a committee to “immediately and fully explore this opportunity together with management,” as it feels the alliance could help GM “realize substantial synergies and cost savings and thereby greatly benefit the company and enhance shareholder value.”

The letter also indicates that Tracinda has reached out to Renault Chairman Louis Schweitzer and Nissan Chairman Carlos Ghosn to alert them to its contact with General Motors.

In a separate letter advising Schweitzer and Ghosn of the GM correspondence, Tracinda noted that “as we recently discussed with Mr. Ghosn, Tracinda believes that General Motors, Renault and Nissan should explore a three-company, partnership-based alliance.”

The Associated Press and Reuters contributed to this report.

http://www.msnbc.msn.com/id/13630565/