I've been pretty glued to the news and various sites following this Nissan-Renault-GM saga/hysteria lately. I've read posts about how this is "Armegedon" for GM's turn around & I've made quite a few posts about why replacing Wagoner is a terrible idea right now. Yet, as far as I can tell, no one (me included) has answered "why".

DaimlerChrysler attempted to run a 3 continent company, and fell flat. The companies that GM is loosing share to are independant (Toyota & Honda) and GM still has manufacturing ties to both. Nissan is doing well in North America, why tie up with a company that's down?

Then I noticed some intresting things.


First, since last May (when GM seemed destined for bankruptcy) Kirk Kerkorian began buying up extra shares of General Motors. $1.7 billion dollars worth!! He's now one of GM's biggest (if not the biggest) shareholder, owning just under 10% of GM. He hasn't become a multi billionaire by purchasing shares in companies that are tanking.

Second, of the stockholder value of the 3 companies, GM's would be the lowest. According to Evok, GM's share of this combined merger would be 17% (Renault's would be 32%, Nissan would be 52%). I may not be the smartest guy on the block but if I owned 10% of GM now, I would own just 3.2% of this new company. The French government owns 15% of Renault which would be something like 6% of this new mega-company, making my influence pretty small not just next to the French government, but in the whole scheme of things.

Finally, why is GM's board even considering this? If anyone is aware of GM's turnaround plans & how close the turnaround is, it's them. Yet the board is taking the time to look into it and see what & how it benefits GM... and make no mistake about it...if it doesn't benefit GM, it's going to be a non-starter.



Then you look at what practical advantages this would bring to the table.

GM recieves their money through increased stock value as well as sales of vehicles and loans. The idea that rases their stock value would make loans cheaper and raise the value of the company.

The French government is Renault's biggest investor. Opel (if I remember) has a bigger market share than Renault and has many models that compete head to head in Europe. In a merger, there would be more pull by Renault and it's investors than GM and theirs. This would mean that there's the potential of pulling plants into France and helping employment in their country, lowering the government's payouts on unemployment which is pretty generous & expensive in France.

Finally, there's Nissan... a direct competitor to Toyota. Toyota is now the world's biggest automaker. General Motors stocks are dirt cheap right now. Even people living in mountain caves in Tibet know that General Motors has a very ambitious, product driven turnaround a mere few years away. GM also is the dominant automaker in China, something Nissan can't even imagine trying to do. A link up with GM would not only give them an inside track into potentially the biggest automarket on the planet, but would make Nissan part of a company that would dwarf Toyota.




At the end of the day, it seems a picture begins to form of what might be going on.

Kirk Kerkorian is an extremely clever old man who is all about making money more than anything else. He's been doing it since most of our grandfathers were young, and I'm sure he knows he doesn't have alot of years left. By the time GM's cars get out, he could easily be incapacitated.. or worse.

Kirk Kerkorian's bought up a gaggle of GM stocks at a time when GM was selling for peanuts. He managed to use leverage to get an auto industry finance expert who happened to be on his payroll on GM's board of directors. Finally, he plays on another automaker who is very merger friendly intrested in General Motors.

While these talks are ongoing (remember he's got an inside guy, Jerry York) GM's stocks are going to continue to go up. If the merger doesn't happen, he cashes out with a profit. If the merger does happen, GM's stocks shoot up, and he makes a bigger profit.

Just a 5% rise in GM stocks (very easy within the next year) net's Kirk Kerkorian a cool $85 million! What if GM's stocks rise 20-25% as the result of all this?

I suspect all this is just a ploy by Kirk Kerkorian to make a gaggle of money on a "No Lose/No Risk" proposition.

Pretty clever.

 

I read another article similar to what you have said on one of the other news cites. My question is, if this is so, why wouldn't such an action to create news for stock jumps by one who has board control/influence not be a violation of federal securities laws?

If it is, this sure seems like a risky move for this clever man. Especially when you have an number of analysts saying the same thing about the means and motive.

 

I keep reading about GM's turnaround, but honestly do you all believe it is happening? The only way they increase sales is by giving cars away at invoice or by having 0% for eternity. The cars that GM produces can't sell themselves on their own merit. They have to have a deep discount for most people to consider them.

 

General Motors allied with the french gov't. This WILL put the kabosh on any turnaround for gm, as myself and many patriotic Americans will not do business with those people plain and simple. Why? Oh I don't know there are any # of books that might help one understand our hatret for that gov't, and what they are doing to US. Eric Shawn " The U.N. Exposed " , Col. David Hunt, " They Just Don't Get It" Great reads, both of them. But I suspect the liberals among us wouldn't be able to handle the truth. Let me say I love gm products, they are the best in the business, as I have said here many times, however I Love this country even more, and if this happens, I honestly don't know what I will do. Is this the begining of the end of this great country.........I sure hope not! I want a new Camaro really bad, and have been a Camaro fan for as long as I can remember, not to mention they pretty much did everything I wanted them to do on the car, but if the timelines ( for production) we've been hearing are correct, and this disgusting bastardization of the greateast American company goes through, this means my $$$ goes to the french gov't! I don't think so.

 

Let's not resort to stupid & ridiculous labels on this, or turn this into another retarded political debate.

Last I heard, the UAW and a good portion of Michigan was was democratic, & I'm pretty sure they have pretty strong opinions on this, while the opposite gang tends to favor free trade and internationalism, including the fellow who's proposing this merger.

Keep politics out of this. You don't want to go there.
I'd be willing to bet you are already sending money to the French via products you buy (and the heavy taxes businesses pay there) without knowing it.

Anything that's coming in the next few years aren't going to be affected. This means Camaro.

 

If I know about it, I will put an end to it. I am just running out my last dunlop on the Buell. Are Pirellis made in france? HMM! I certainly don't like political arguements, and that is not my intention. But to say the least I am mad as hell about this abomination. And sick too. And now the GF is pissed at me too. I will just have to face the fact that happiness is for other people, not me. Oh well like sucks then you die, once you bury all those who you care about! I guess this merger is great news for those who don't like me. Anyone know the cost of tattoo removal? Kidding I wouldn't go that far. There is this awesome kit car I was thinking of building, and I already have a tremec, and some small blocks I could build. I really wanted a new Camaro too! Why ken lay couldn't it be this rich a-hole?

 

Well that's 30 seconds of my life I'll never get back. Way to buzzkill an otherwise interesting thread.

 

Rant much?

 

Yes. When I'm this passionate about something, I do. I have been listening to these bums blast GM for years and now they've gotten many of us to foolishly believe their lies to the point that the company's stock has been dropping, and now low & behold what are they looking to buy. Again they must think we are complete dumb asses over here! Well some of us are not. And many of us are being led like sheep right into our own slaughterhouse. Mark my words no good for GM will come from this abomination. And remember, " What's Good for GM is Good for The Country", and vise versa. Wake up people! The rug is being pulled ever so slowly from under your feet, and you don't even realize it. We never realize what we had till it's gone. Going, Going,............................................ ......................................

 

The guy's been trying to turn this forum into his own version of the O'Reilly Factor for a while now. Ignore him.

Guy,

Kerkorian's obviously in this for the money. That, after all, is the whole idea of investments. After stupidly buying shares at $32 last year (made possible by him talking up the stock for no reason when it was around $26), extreme measures would likely be necessary for him to recover his investment.

I think that Nissan/Renault are primarily interested in access to China via GM's presence there.

 

I think if it wasn't for the Chinese market, Ghosn wouldn't heve even taken a minute to decide not to pursue it.

At any rate, the more I think & read about it, the less likely I think it will happen. However, just the fact that GM and R-N are actually taking the time to look at it (no doubt owning 10% of a corperation and having your man on the board has benefits on what you can force the board to do) is going to send the stocks of GM enough for Kirk to not just cash out, but perhaps even have advance notice (I know, inside trading) before hand.

BTW, FWIW: I don't even think O'Rielly has that much hostility... and a good portion of what he does have is just for the camera and to sell books. He's friends with alot of the people he lays in to.

 

Well mybe he'll (Special K) cash out in a couple months and GM can continue with its revolution and its Hero (Camaro)

 

He's more like Michael Savidge (sp) and Ann Coulter.

 

Bad thing is, if he cashes out suddenly or all at once, GM's stock is going to crash. Dumping shares tends to do that.

Ann Coulter. Now there's a piece of work.

 

The more I think about it the more sense it makes. One of your biggest share holders wants this thing considered. Either at least give it a serious look or risk him selling immediately. If there is no benefit for GM then at least you can say you reveiwed it. He may sell anyway but at least you postponed it. If there is mutual benefit then great, see if something can be worked out.

maybe thats wrong or maybe yall figured this out long time ago. I just thought that this was pretty much a sure thing till now.

If we're going to TRY to avoid politics, can we do it together please?