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Alliance Talks End Between GM, Renault and Nissan

STEVE INSKEEP, host:

And here's the latest on two companies that have been struggling with bad news. California's attorney general has filed criminal charges against people connected with Hewlett-Packard. It's the aftermath of an effort to spy on board members and journalists.

Former chairman Patricia Dunn faces charges, along with three outside investigators, and the company's former ethics lawyer.

DEBORAH AMOS, host:

General Motors is in a different kind of trouble, and an effort to get out of it just fell apart. The money losing automaker has ended its discussions about a three-way alliance with Nissan and Renault.

The car companies announced their decision to terminate talks yesterday. It happened even before the 90-day deadline the sides had set to study the proposed tie-up.

NPR's Jack Speer reports.

JACK SPEER: Even before GM's chairman and CEO Rick Wagoner stepped up to the microphones yesterday, it was clear that talks were in trouble. Wagoner said GM's board, after reviewing the proposed alliance, voted unanimously to pull the plug.

Mr. JACK WAGONER (CEO, General Motors): In the end, the GM board determined that the alliance structure proposed by Renault-Nissan was not in the best interest of GM shareholders.

SPEER: Wagoner said their analysis showed benefits of an alliance heavily skewed toward Renault and Nissan. He said it would also be a distraction at a time GM is making progress in its on-going turnaround.

Kevin Tynan is an auto industry analyst at Argus Research.

Mr. KEVIN TYNAN (Auto Industry Analyst, Argus Research Company): GM's heart really wasn't in it. I think they want to stay on the path of the restructuring actions that they've been on. Financial results for the last two quarters were pretty good. You know, that they're on the right path to turn this company around, and they want to see that through.

SPEER: GM's largest individual shareholder, Kirk Kerkorian, who pushed for the discussions and owns a nearly 10 percent stake in GM, expressed disappointment that the talks had broken off.

Jack Speer, NPR News, Washington. Transcript provided by NPR, Copyright NPR.

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