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The Alliance Dance: Don't Get Too Excited.

Wednesday, 17 Jan 2007 | 9:53 AM ET

The headlines crossed the wires hours apart, from different parts of the world, and but will do little to excite investors about auto stocks.

A Toyota executive on Tuesday said the automaker would be open to forming an alliance with Ford to work on specific projects-such as sharing technology.

Then last night, in a speech in Dearborn, Michigan, GM CEO Rick Wagoner said the world's largest automaker is open to pursuing a alliances with other automakers based on project cooperation.

My reaction?
Good. Strategic alliances can be a smart way for automakers to cut costs, share engineering, and develop new technologies. For the big 3 in particular, strategic alliances on new systems like hybrids, makes a lot of sense.

My other reaction is that investors in auto stocks should not expect this alliance talk to goose the auto stocks as the GM-Nissan/Renault talks did last summer and fall. Back then the speculation of automakers forming a full alliance and teaming up, pushed shares of GM to the $34 dollar range.

But when it comes to strategic alliances, the benefits are harder for investors to recognize. In most cases, it's even tougher to determine what exactly those. Partnerships contribute to the bottom line.

So when you see the stories about GM and Toyota talking about alliances, keep it in perspective. These partnerships could be incredibly beneficial, just don't expect a payoff with the stocks moving higher.

Questions? Comments? BehindTheWheel@cnbc.com

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  • Phil LeBeau is a CNBC auto and airline industry reporter based in the Chicago bureau and editor of the Behind the Wheel section on CNBC.com.

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