Good money going after bad?

In a letter to GM Chief Executive Rick Wagoner, Tracinda Corp., the investment arm for billionaire investor Kirk Kerkorian, suggested the automaker form a committee to "immediately and fully explore" the possibility of a partnership under which Nissan and Renault would buy a "significant minority interest" in GM.

Kirk Kerkorian, GM's largest single shareholder, owns about 10 percent of GM. His representative, Jerry York, sits on GM's board and the automaker since January has followed a number of his suggestions for a faster turnaround, including executive pay cuts and a reduced dividend.

GM shares rose 9 percent to $29.90 on the New York Stock Exchange after trading higher before the bell.

Full article here

PlanoA4 - 6/30/2006 1:32:46 PM

+1 Boost

Let Carlos Ghosn get a hold of GM? Now THAT would be interesting, holy crap think of the ramifications!

MercBasher - 6/30/2006 2:33:35 PM

+1 Boost

I believe almost any other [non-GM] manufacturer's executive team would do better than the smug crew currently at the helm of GM.

Yes even DCX!

wwww - 6/30/2006 4:04:03 PM

+1 Boost

The partnership Idea is good ideally, cuz it can infill gaps where each company lacks its resources. This might also trigger some more cut backs. By expanding the company profile like this, it can ultimately take the best of each company and integrate it into the whole equation for example: Producing European styling/engineering vehicles with Japanese fit and finish (including assembly) and have a general appeal for everyone in the market who is finding affordable cheap cars. If this equation works perfectly, you will be seeing a reliable, nice looking and great handling American vehicle that can easily be marketed Internationally forming a Global- Interaction approach at a cheap and affordable price reflecting the "General" in General Motors.

A car for everyone in the General Public.

However the drawbacks are brand imagine, esp how GM had placed itself in a dark bottomless pit of bad interior design/ realiabitity issues and bad resell value of its cars. If GM can fix these problems using a partnership with Reanult-Nissan then it would be the smartest move. But reliability and quality must be improved in the whole range from GM to Nissan for this to work.

And this might take some time. They should make all cars as Reliable as the Infiniti and Lexus then they have got a game to play!

woood - 7/1/2006 2:27:24 AM

+1 Boost

Or a Corvette with a clio's puny engine? yikes!!!

Could this be a ploy to increase GM share price? If so, this could make kerkorian tons of money after buying GM stocks at a bargain just last year. Although, the buy in of Renault could work in the long run benefitting GM more than Renault.

woood - 7/3/2006 5:10:23 AM

+1 Boost

Kirk Kerkorian makes a ton of money buying shares of companies whose share prices are "cheap". He buys just enough to have a seat on the board. He then pushes for reforms, business strategy, mergers or whatever means to make the company profitable again and therefore increase share price. Then he makes money by selling at the higher share price. Its not exactly insider trading since it would take years to drive up the share price in GM's case.