General Motors Corp. (NYSE: GM) will be joining up with a former Soviet territory to produce and sell Chevy-branded vehicles. GM and Uzavtosanoat (located in Uzbekistan) have signed a partnership agreement for a joint venture that will target consumers in that middle-Asian country. Initially, the joint venture is projected to produce about 250,000 cars annually.

GM continues to invest in emerging markets worldwide to offset sale problems here in its domestic market, and this should be a good move for the auto giant. The ex-Soviet republic had a falling out with the U.S. over a 2005 citizen uprising (and human rights violations en masse) in Andijan, but has warmed back to American business with this rather large partnership.

The GM/Uzbekistan joint partnership will take advantage of a plant that exists in the town of Asaka where Uzavtosanoat already has a factory that recently operated as part of a joint venture with the failed South Korean automaker Daewoo. Ironically, that plant already assembles cars from shipped-in assembly kits supplied by -- GM . well, GM Daewoo Auto & Technology Company, anyway. GM Daewoo is the South Korean unit of the auto giant which happened as a result of GM's buying Daewoo's assets over five years ago.

General Motors Corp. (NYSE: GM) has the UAW as a thorn in its side once again, as UAW President Ron Gettelfinger has picked a fight with GM about proposed funding for the automaker's retiree health fund. Is this the same old song and dance we've seen before?

UAW officials labeled GM as a "strike target" less than 24 hours after disputing procedures for funding GM's retiree health care fund, and the contract between the union and Detroit's GM ends at midnight tonight. So, there are about 14+ hours left for the two boys in the sandbox to put aside differences and come to a compromise. Place your bets now.

With the big three (or big two, if you're talking public companies) having a combined $114 billion in health care obligations, the fight between auto unions and large domestic automakers will see no end, if ever. But, in recent contract talks, the spirit of the meetings was described as "cooperative talks." Well, until the last minute (like always). Tempers are flaring most likely, and egos are dropping bombs all over the meeting room floor (maybe even f-bombs, heh).

But with the three largest domestic automakers losing a combined $15 billion in 2006, the UAW relented in its fight to get them agreeing on paying for all health care costs for all employees, active and retired. Looks like that "you all pay for everything" stance is back in some form. GM does not need employees walking out to picket at this point in 2007, but that is possibly what could happen over the weekend based on what happens in Detroit today.

Note: The Daily Option Update is provided by Stock Options Specialist Paul Foster of theflyonthewall.com.

Volatility Index S&P 500 Options-VIX down .07 to 10.15.

General Motors-(NYSE:GM) option implied volatility increases to 37: Dow Jones says "GM in talks to purchase Chrysler." General Motors is recently down .41 to $36.02. Dow Jones reported "GM in talks to purchase Chrysler Group." GM call option volume of 22,023 contracts compares to put volume of 43,510 contracts. General Motors March option implied volatility of 35 is below its 26-week average of 40 according to Track Data, suggesting decreasing price risks.

DaimlerChrysler-(NYSE:DCX) option implied volatility Spikes on Dow Jones report on GM. DaimlerChrysler is recently up $2.69 to $72.85. Dow Jones reported: "General Motors in talks to purchase Chrysler Group." DCX call option volume of 24,099 contracts compares to put volume of 5,947 contracts. DaimlerChrysler March option implied volatility of 31 is above a level from 22 yesterday and above its 26-week average of 25 according to Track Data, suggesting larger price risks.

Option volume leaders today were: Google (NASDAQ:GOOG), Best Buy (NYSE: BBY), Apple, Inc. (NYSE:AAPL) and Microsoft (NASDAQ:MSFT).

Volatility Index S&P 500 Options-VIX up 1.19 to 11.16.

Microsoft Corp's. (NASDAQ: MSFT) February option implied volatility collapsed to 19 after record Q2 revenue of $12.54 billion. Microsoft reported Q2 EPS of 26 cents versus consensus estimates of 23 cents. Q2 revenue rose 6%. Microsoft launches Vista, Office 2007 and exchange Server 2007 on 1/30. Goldman Sachs says "good second quarter and stronger growth ahead." Microsoft February option implied volatility of 17 is below its 26-week average of 22 according to Track Data, suggesting decreasing price risk.

General Motors' (NYSE: GM) implied volatility was low at 34 going into the financial delay on its restatement. General Motors will delay its Q4 and full year earnings report, which was expected to be released next week, to again restate financial results. Citigroup has a $24 price target on General Motors. General Motors' overall option implied volatility of 34 is below its 26-week average of 42, according to Track Data, suggesting decreasing price fluctuations.

Option volume leaders today were: Amgen (NASDAQ: AMGN), Apple Computer (NASDAQ: AAPL), Nokia (NYSE: NOK), Microsoft and eBay (NASDAQ: EBAY).

Note: The Daily Option Update is provided by Options Specialist Paul Foster of theflyonthewall.com.