yes it can really goo, no really, i know it does not look like it can but it really can go, kangoo i say
Posted on 07/05/2006 7:39:54 PM PDT by Flavius
DETROIT - Billionaire investor Kirk Kerkorian could seize control of General Motors Corp. easily with help from automakers Nissan and Renault. ADVERTISEMENT
Kerkorian's Tracinda Corp. owns 9.9 percent of GM's shares. If Renault SA of France and Nissan Motor Co. of Japan each buy stakes of up to 10 percent, they collectively would be the largest shareholder and could have their way with the icon of American industry, analysts said on Wednesday.
With such control, the disgruntled Kerkorian could oust GM Chairman and CEO Rick Wagoner and replace him with Carlos Ghosn, the chief executive of both Renault and Nissan.
"It's certainly within the realm of possibility," said Pete Hastings, an auto industry corporate bonds analyst with Morgan Keegan & Co. Inc. in Memphis, Tenn.
Ghosn and Kerkorian have discussed the possibility of Renault and Nissan buying a minority stake in GM and forming an alliance with the nation's largest automaker, which is battling rising costs, fierce competition from Asian automakers and shrinking sales in the U.S. Ghosn gained a reputation as a strict cost cutter while leading the revival of Nissan.
GM is a closely held company, with six entities controlling more than 60 percent of its common stock, making it relatively easy to collect 30 percent or 32 percent of the shares, said Gerald Meyers, the former chairman of American Motors Corp. who now teaches at the University of Michigan. With about one-third of the shares, no one else would be large enough to stand in the way, Meyers said.
"Everybody else is a little guy, and when you talk, everybody else listens," he said. "To fight off somebody that's that large, relatively speaking, you have to go out on a broad front and persuade the little shareholders that you're right and they're wrong. That takes a lot of effort, a lot of time and a lot of money."
Hastings and Meyers said it's likely other institutional shareholders will join Kerkorian, giving him control of GM with only a minority investment.
"If those institutions get anxious, they can all vote the same way, and then it's curtains for anybody who's in opposition," Meyers said.
Carrie Bloom, a spokeswoman for Kerkorian, would say only that Nissan and Renault are interested in purchasing a minority interest in GM. She would not comment when asked about replacing management or taking control of the company.
Spokesmen for GM's two largest minority shareholders, State Street Bank and Trust Co. of Boston and Capital Research and Management Co. of Los Angeles, said they could not comment on whether they would join Kerkorian. Messages were left with the other three entities that own more than 5 percent of GM's common stock.
David Healy, an industry analyst with New York-based Burnham Securities Inc., said Kerkorian is merely using news of the potential alliance to push up GM's stock price. He called the prospect of taking control of the company preposterous but cautioned that GM still must pay attention to Kerkorian because of his success as a corporate raider and because he has a representative, Jerome York, on GM's board.
John Chevedden, of Redondo Beach, Calif., whose family owns about 2,000 shares of GM stock, said he would welcome Wagoner's removal because of the company's "dismal performance."
He said Ghosn would be great but questioned whether he would have the time to run Nissan, Renault and GM.
Healy called Ghosn a miracle worker who rescued Nissan from the grave after it was acquired by Renault. Ghosn, he said, has done it all at Renault and Nissan and is getting bored and "looking for new fields to conquer."
"He's one of the few that's actually executed a turnaround after an acquisition," Meyers said of Ghosn. "That's a very hard commodity to come by."
GM said Wednesday that its board of directors will meet by telephone Friday, a week after Kerkorian disclosed his efforts to form the alliance with Renault and Nissan.
Spokeswoman Toni Simonetti said the meeting was scheduled before Kerkorian proposed the three-way alliance, but she would not disclose what was on the agenda.
The board met by teleconference last week to discuss Kerkorian's proposal, and the company issued a statement saying that members would take the plan under advisement.
Normally the board meets the first week of every month, but it recently has been talking more frequently, Simonetti said.
"In addition to its regularly scheduled meetings, the board recently has been convening a little more regularly by teleconference to just stay up to date on the progress of the turnaround strategy and such," she said.
GM, the nation's largest automaker, lost $10.6 billion last year but made a $445 million profit in the first quarter of 2006.
Simonetti said GM has made great strides in recent months, with expense savings from 35,000 hourly workers taking early retirements and buyouts, an agreement on health care cost concessions with the United Auto Workers and freezes in health care and pension benefits for salaried workers and executives.
The company also has new models coming out that should boost sales in the second half of the year, she said.
"I think Rick Wagoner had formulated a turnaround strategy, and we in the past year have successfully implemented a significant share of that turnaround plan," Simonetti said.
GM shares rose 1 cent Wednesday to close at $29.42 on the New York Stock Exchange
Then they'll surrender to Daimler-Benz-Chrysler.
yes it can really goo, no really, i know it does not look like it can but it really can go, kangoo i say
oh thats hilarious
Who would want to acquire their pension problem?
Goodbye GM.
They will BK out of it.
whatever the way there is to dump that program it will be found
maybe all gm workers get onto french welfare program
that would be tres bien
GMAC takes everyone ELSES : )
mai oui!
nuh, just ship them into mexico, they have plenty of places open cause all of their population moved to southern usa and beyond
If I bought 60% of GM I could own it too.
No one to blame but us.
Someday, perhaps soon, someone will get the idea of:
a) building cars that people want to buy, AND
b) doing it with a sound business model
Guilting us with "buy American" just isn't working (*sob*). Until then, they can all suck their thumbs and die for all I care.
Remember the Renault "Alliance"? It was a bastard product of Renault's 5% stake in AMC in 1979 (and a true bastard at that...). Renault execs ran the company, and by '83 AMC was a majority owner. Btw, a core motivation for the Renault investment was U.S. government restrictions on "American" content on auto sales, designed to protect labor.
Didn't end happily for AMC. After a bizarre series of events, from U.S. security concerns over Army contracts to the assassination of the Renault Chairman by whacked, commie terrorists, Renault soldout to Chrylser in 1987.
But things might be different now: Ghosn is for real. And ambitious.
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