GM / Renault / Nissan Alliance & Other Speculations (Update Pg 4/5)
07-03-06, 05:14 PM
#31
Guest
Posts: n/a
Renault has a controlling 44-percent stake in Nissan. The French state has a 15.33 percent stake in Renault.
This is sig potential
I just don't see how this is advantagous to anyone, outside of saying "Hey we are the biggest company".
Ghosn though, might just have the "male anatomy" to tell the unions to stuff it.
This is sig potential
I just don't see how this is advantagous to anyone, outside of saying "Hey we are the biggest company".
Ghosn though, might just have the "male anatomy" to tell the unions to stuff it.
07-03-06, 05:38 PM
#32
Economies of scale of course... Short term, no gains, mid-term some gains and long term, they can save some costs for sure.
For example - look at R&D, this is where most money can be saved, without trully influencing the customer. Development of technologies, engines, etc, can be headed by one group, instead of two, thus halving the cost (or actually doubling amount of R&D).
For example - look at R&D, this is where most money can be saved, without trully influencing the customer. Development of technologies, engines, etc, can be headed by one group, instead of two, thus halving the cost (or actually doubling amount of R&D).
07-04-06, 10:12 AM
#33
Super Moderator
Big Holder Looks to Turnaround Artist to Transform G.M.
By NICK BUNKLEY
Published: July 1, 2006
Carlos Ghosn, Nissan chief, has recently taken steps to revive Renault.
DETROIT, June 30 — Carlos Ghosn has never recoiled from big challenges, and the auto industry has none bigger than fixing General Motors.
As the head of Nissan Motors, Mr. Ghosn rapidly transformed an also-ran to one of the most profitable major automakers. Since he added the title of chief executive of Nissan's lagging French partner, Renault, a year ago, he has taken steps to begin a similar turnaround there.
So, it would seem natural that Kirk Kerkorian, the billionaire investor who is General Motors' largest shareholder, would turn to a man with a seeming golden touch to work some of his magic on Detroit's struggling giant.
But with recent stumbles at Nissan, Japan's No. 3 automaker, the question is whether Mr. Ghosn (the name rhymes with "phone") is still a superhero or a mere mortal.
Mr. Kerkorian's proposal to create a partnership with G.M., Nissan and Renault, disclosed Friday, notes the potential for synergy and cost savings that such an alliance would create. But analysts speculated that a major motivation is his desire for an experienced turnaround artist to be linked closely with G.M..
Jerome B. York, an adviser to Mr. Kerkorian, specifically cited Mr. Ghosn in a speech in January in Detroit as an example of where G.M. should look for guidance in its revamping. G.M., Mr. York said, must clearly articulate its plan, move quickly and be willing to discard past practices that no longer work — all hallmarks of Nissan's rejuvenation.
Born in Brazil to Lebanese parents, Mr. Ghosn took Nissan from a $5.6 billion loss in 2000 to a $2.7 billion profit in 2001. His autobiography became a best seller, he was named "father of the year" (despite his frequent globetrotting that took him away from his wife, Rita, and four children) and his life became the subject of a series of manga, or comic books.
Along with buzz, he achieved results, like his goal of selling one million cars a year in the United States, with help from new models like the Murano crossover vehicle, Xterra sport utility and a retooled lineup for its overlooked Infiniti luxury brand.
But other vehicles have failed to live up to expectations, among them the Quest minivan, whose looks proved too space-age for American moms, and the Titan pickup truck, which proved little match for Detroit models.
Sales at Nissan have faltered in the last year and the company must replace more than half the employees in its North American headquarters after a cross-country move from California to Nashville. Some of the 700 white-collar staff members who have refused to follow Nissan were executives integral to the company's turnaround.
At Nissan's annual shareholder meeting on Tuesday, he admitted that 2006 sales would probably fall short of targets. Through May, the company's sales were down 18 percent in its home market, excluding minicars, and 3 percent in the United States, where Nissan generates as much as 60 percent of annual profits.
Renault has its own problems. There, Mr. Ghosn is vowing to broaden the product lineup, which has depended too heavily on a single model, the Megane. Renault sold 2.5 million vehicles in 2005, up 1.7 percent, but sales in Europe, its primary market, fell 4.1 percent. Mr. Ghosn has issued profit warnings for Renault in 2006 and indicated 2007 would be difficult, too. "A lot of the industry analysts are taking a look at Ghosn and thinking maybe he's human after all," said James Sanfilippo, senior industry analyst for Automotive Marketing Consultants in Bloomfield Hills, Mich. Still, in an industry full of challenges and deposed chief executives, Mr. Ghosn, 52, is viewed as one of the few leaders with the knowledge to help a company as troubled as General Motors. Mr. Ghosn has told associates that he feels that way, too, said David Magee, who wrote "Turnaround: How Carlos Ghosn Rescued Nissan" in 2003.
"He's positive he can fix G.M.," Mr. Magee said Friday. "The challenge at G.M. seems insurmountable, but it was no less, no different at Nissan when he went in there. Nissan was just smaller."
Mr. Magee said the slowdown that Nissan was experiencing now can be expected after such an ambitious restructuring. "It's kind of like when you mow your grass too fast you miss some blades," he said.
Mr. Ghosn is fluent in Portuguese, Spanish, Italian, French and English, but speaks only elementary Japanese — the sole language of most Nissan employees.
He amazed his family at the age of 5 with an ability to identify cars by the sound of their horn. He earned engineering degrees from the École Polytechnique and École des Mines de Paris in France and spent 18 years at Michelin, the French tire maker, before joining Renault in 1996.
He moved to Nissan in 1999, when it forged its partnership with Renault, and became the top executive two years later.
At the time, Nissan was $20 billion in debt, and its global market share had declined for 27 consecutive years. He closed plants and laid off thousands of workers, going against Japan's traditional business culture, and within a year increased Nissan's operating margin to a record 10.6 percent.
With Mr. Ghosn at the helm, Nissan introduced successful new models and became "an edgy car company that couldn't do anything wrong," said Mr. Sanfilippo, the analyst.
In 2005, Nissan achieved all three goals that Mr. Ghosn had set as part of a three-year plan he called Nissan 180: the company increased global sales by one million vehicles, surpassed an 8 percent profit margin and eliminated its debt.
With his dual chief executive titles for companies on two continents, Mr. Ghosn may be stretching himself too thin, some analysts say. He now spends two weeks a month in Paris, and 10 days a month in Japan. If he keeps to his current schedule, that would leave him six days a month at G.M.
It is not known how active a role Mr. Ghosn would play in G.M., if a deal was worked out. But the proposal by the Tracinda Corporation, Mr. Kerkorian's investment arm, indicates that he is willing to push G.M. into action, perhaps with Mr. Ghosn as another weapon in that effort.
"Both Tracinda and Jerry York have said out loud and along the way that more needs to be done, rather than less, and sooner, rather than later," said Terry Christensen, Mr. Kerkorian's lawyer. "You don't have to talk to Carlos Ghosn very long to see that he believes that things need to be done sooner, rather than later."
Mr. Kerkorian is reported to have broached the possibility of an alliance with G.M. to Mr. Ghosn over dinner in Tennessee about 10 days ago. On Friday, Nissan and Renault indicated that they were open to expanding their partnership, "under the right circumstances and with the appropriate partners."
Mr. Ghosn's reluctance to leave Nissan and Renault — he declined an offer last August from William Clay Ford Jr. to join Ford Motor— appears to be behind Mr. Kerkorian's partnership proposal. Mr. Kerkorian owns 56 million shares of G.M., a 9.9 percent stake, but to date his investment has not been profitable.
"They're after Ghosn's leadership ability as much as anything," said John Paul MacDuffie, a management professor at the Wharton School at the University of Pennsylvania.
Published: July 1, 2006
Carlos Ghosn, Nissan chief, has recently taken steps to revive Renault.
DETROIT, June 30 — Carlos Ghosn has never recoiled from big challenges, and the auto industry has none bigger than fixing General Motors.
As the head of Nissan Motors, Mr. Ghosn rapidly transformed an also-ran to one of the most profitable major automakers. Since he added the title of chief executive of Nissan's lagging French partner, Renault, a year ago, he has taken steps to begin a similar turnaround there.
So, it would seem natural that Kirk Kerkorian, the billionaire investor who is General Motors' largest shareholder, would turn to a man with a seeming golden touch to work some of his magic on Detroit's struggling giant.
But with recent stumbles at Nissan, Japan's No. 3 automaker, the question is whether Mr. Ghosn (the name rhymes with "phone") is still a superhero or a mere mortal.
Mr. Kerkorian's proposal to create a partnership with G.M., Nissan and Renault, disclosed Friday, notes the potential for synergy and cost savings that such an alliance would create. But analysts speculated that a major motivation is his desire for an experienced turnaround artist to be linked closely with G.M..
Jerome B. York, an adviser to Mr. Kerkorian, specifically cited Mr. Ghosn in a speech in January in Detroit as an example of where G.M. should look for guidance in its revamping. G.M., Mr. York said, must clearly articulate its plan, move quickly and be willing to discard past practices that no longer work — all hallmarks of Nissan's rejuvenation.
Born in Brazil to Lebanese parents, Mr. Ghosn took Nissan from a $5.6 billion loss in 2000 to a $2.7 billion profit in 2001. His autobiography became a best seller, he was named "father of the year" (despite his frequent globetrotting that took him away from his wife, Rita, and four children) and his life became the subject of a series of manga, or comic books.
Along with buzz, he achieved results, like his goal of selling one million cars a year in the United States, with help from new models like the Murano crossover vehicle, Xterra sport utility and a retooled lineup for its overlooked Infiniti luxury brand.
But other vehicles have failed to live up to expectations, among them the Quest minivan, whose looks proved too space-age for American moms, and the Titan pickup truck, which proved little match for Detroit models.
Sales at Nissan have faltered in the last year and the company must replace more than half the employees in its North American headquarters after a cross-country move from California to Nashville. Some of the 700 white-collar staff members who have refused to follow Nissan were executives integral to the company's turnaround.
At Nissan's annual shareholder meeting on Tuesday, he admitted that 2006 sales would probably fall short of targets. Through May, the company's sales were down 18 percent in its home market, excluding minicars, and 3 percent in the United States, where Nissan generates as much as 60 percent of annual profits.
Renault has its own problems. There, Mr. Ghosn is vowing to broaden the product lineup, which has depended too heavily on a single model, the Megane. Renault sold 2.5 million vehicles in 2005, up 1.7 percent, but sales in Europe, its primary market, fell 4.1 percent. Mr. Ghosn has issued profit warnings for Renault in 2006 and indicated 2007 would be difficult, too. "A lot of the industry analysts are taking a look at Ghosn and thinking maybe he's human after all," said James Sanfilippo, senior industry analyst for Automotive Marketing Consultants in Bloomfield Hills, Mich. Still, in an industry full of challenges and deposed chief executives, Mr. Ghosn, 52, is viewed as one of the few leaders with the knowledge to help a company as troubled as General Motors. Mr. Ghosn has told associates that he feels that way, too, said David Magee, who wrote "Turnaround: How Carlos Ghosn Rescued Nissan" in 2003.
"He's positive he can fix G.M.," Mr. Magee said Friday. "The challenge at G.M. seems insurmountable, but it was no less, no different at Nissan when he went in there. Nissan was just smaller."
Mr. Magee said the slowdown that Nissan was experiencing now can be expected after such an ambitious restructuring. "It's kind of like when you mow your grass too fast you miss some blades," he said.
Mr. Ghosn is fluent in Portuguese, Spanish, Italian, French and English, but speaks only elementary Japanese — the sole language of most Nissan employees.
He amazed his family at the age of 5 with an ability to identify cars by the sound of their horn. He earned engineering degrees from the École Polytechnique and École des Mines de Paris in France and spent 18 years at Michelin, the French tire maker, before joining Renault in 1996.
He moved to Nissan in 1999, when it forged its partnership with Renault, and became the top executive two years later.
At the time, Nissan was $20 billion in debt, and its global market share had declined for 27 consecutive years. He closed plants and laid off thousands of workers, going against Japan's traditional business culture, and within a year increased Nissan's operating margin to a record 10.6 percent.
With Mr. Ghosn at the helm, Nissan introduced successful new models and became "an edgy car company that couldn't do anything wrong," said Mr. Sanfilippo, the analyst.
In 2005, Nissan achieved all three goals that Mr. Ghosn had set as part of a three-year plan he called Nissan 180: the company increased global sales by one million vehicles, surpassed an 8 percent profit margin and eliminated its debt.
With his dual chief executive titles for companies on two continents, Mr. Ghosn may be stretching himself too thin, some analysts say. He now spends two weeks a month in Paris, and 10 days a month in Japan. If he keeps to his current schedule, that would leave him six days a month at G.M.
It is not known how active a role Mr. Ghosn would play in G.M., if a deal was worked out. But the proposal by the Tracinda Corporation, Mr. Kerkorian's investment arm, indicates that he is willing to push G.M. into action, perhaps with Mr. Ghosn as another weapon in that effort.
"Both Tracinda and Jerry York have said out loud and along the way that more needs to be done, rather than less, and sooner, rather than later," said Terry Christensen, Mr. Kerkorian's lawyer. "You don't have to talk to Carlos Ghosn very long to see that he believes that things need to be done sooner, rather than later."
Mr. Kerkorian is reported to have broached the possibility of an alliance with G.M. to Mr. Ghosn over dinner in Tennessee about 10 days ago. On Friday, Nissan and Renault indicated that they were open to expanding their partnership, "under the right circumstances and with the appropriate partners."
Mr. Ghosn's reluctance to leave Nissan and Renault — he declined an offer last August from William Clay Ford Jr. to join Ford Motor— appears to be behind Mr. Kerkorian's partnership proposal. Mr. Kerkorian owns 56 million shares of G.M., a 9.9 percent stake, but to date his investment has not been profitable.
"They're after Ghosn's leadership ability as much as anything," said John Paul MacDuffie, a management professor at the Wharton School at the University of Pennsylvania.
07-04-06, 11:44 AM
#34
Originally Posted by retrodrive
At this point almost any alliance GM scores will raise its stock price. The company is in a dump. Clever move, no doubt.
oh well
07-04-06, 12:41 PM
#35
3rd
Originally Posted by LexArazzo
But with recent stumbles at Nissan, Japan's No. 3 automaker, the question is whether Mr. Ghosn (the name rhymes with "phone") is still a superhero or a mere mortal.
07-04-06, 02:55 PM
#37
Originally Posted by rominl
i just don't think it's a good move for nissan to have any work relationship with gm. just don't see how it will work....
oh well
oh well
07-04-06, 06:25 PM
#38
Originally Posted by Pearlpower
Yeah , I agree. I don't think an association with GM would help anyone out there. The brand image itself would drag down Nissan.
i mean..... the only thing i would associate myself with GM is rental car......
07-04-06, 06:44 PM
#39
Rental? Gheeesh. A few weeks ago the Ford Fusion (2006 car) broke again and they tried to get me another Ford for a rental. 
Then a GM car. Nope. Nope. Nope. Finally they went to another location and got me a Nissan Murano. Problem with that was the prior renter had smoked pot in the thing so I was feeling the munchies for almost a week. 
Still better than driving the alternative.
Then a GM car. Nope. Nope. Nope. Finally they went to another location and got me a Nissan Murano. Problem with that was the prior renter had smoked pot in the thing so I was feeling the munchies for almost a week. Still better than driving the alternative.
07-04-06, 07:09 PM
#40
Originally Posted by Pearlpower
Rental? Gheeesh. A few weeks ago the Ford Fusion (2006 car) broke again and they tried to get me another Ford for a rental. Then a GM car. Nope. Nope. Nope. Finally they went to another location and got me a Nissan Murano. Problem with that was the prior renter had smoked pot in the thing so I was feeling the munchies for almost a week. Still better than driving the alternative.
Then a GM car. Nope. Nope. Nope. Finally they went to another location and got me a Nissan Murano. Problem with that was the prior renter had smoked pot in the thing so I was feeling the munchies for almost a week. Still better than driving the alternative. so wait, how do you know what grass smell like if you haven't tried it before? 
but yeah, i do agree that every time i am at rental car company, i have a very tough time "choosing" my rental. i mean..... what difference does it make..... they are still GM @_@
07-04-06, 07:15 PM
#41
HA HA, that's the thing. I did not know. I had a cold at the time and not till days later did someone tell me. Once my sniffer came back I knew. Been to too many concerts not to know. Plus I ended up in an accident with the thing (5 car on 10 freeway) and chased down the hit and run lady in her Accord. I was sweating when the CHP showed up as I did not want them to sniff it too. Can you imagine me expaining that one to them? "Ummm, yeah right sir, get in the back of my patrol car please. "
And before anyone says that pot and GM is not the same subject, look at some of their cars. They must be smok'n.!
Can you imagine me expaining that one to them? "Ummm, yeah right sir, get in the back of my patrol car please. "And before anyone says that pot and GM is not the same subject, look at some of their cars. They must be smok'n.!
Last edited by Pearlpower; 07-04-06 at 07:19 PM.
07-04-06, 11:12 PM
#42
Guest
Posts: n/a
by Peter M. DeLorenzo
Kerkorian + York + Ghosn = Disaster for General Motors.
Detroit. Anyone who actually believed that Kirk Kerkorian and his designated spear-carrier, Jerry York, had benevolent intentions with their "investment" in General Motors had their attitude adjusted Friday afternoon (June 30) when the two roving quick-buck aficionados revealed their "Plan" to GM (and of course, the media) - which amounts to demanding that GM consider a linkage with Renault SA and Nissan. And it was also revealed that the two had even gone so far as to have secret meetings with Carlos Ghosn, the diminutive megalomaniac and dual CEO of Nissan and Renault, who was looking for another ego boost, apparently - to float their proposal and get his buy-in.
Make no mistake - this isn't about creating a new global automotive powerhouse well-equipped to do battle deep into this century, one that will keep Toyota from taking over the world. And this certainly isn't about doing what's best for General Motors and the people who have so much invested in the fortunes of the company. And this in no way, shape or form has anything to do with solidifying America's manufacturing base or shoring up the economy.
No, this is about flat-out greed, pure and simple.
It's about spiking the stock, roiling the markets and getting the media worked up. Forget the noble intentions espoused by York early on, that he and Kerkorian were just trying to get GM reshaped and on-track for survival so that it could thrive in the future. Forget about all the genuine concern that York spoke about in his speech to the investment community in Detroit last January - that he knew what GM needed to do to become a healthy industry player for years to come, if they'd only listen. No, this is about getting Kerkorian's investment going in the right direction as soon as possible - and if they have to set up a logistical nightmare of an "alignment" to get their financial return jacked-up asap, then they're going to do what they have to do.
And the three "players" involved here just happen to be the Three Amigos of Greed, Unfulfilled Aspirations - and Ego.
Kirk Kerkorian, the multi-billionaire "investor," isn't just about making money. Because if it were just about the money he would have retired to his tennis games long ago, he has so much of it. No, Kerkorian likes to not only make money; he likes to mess with people and companies in the process. His intentions are as transparent as they are malevolent. It's The Game that he thrives on. Period.
And in Jerry York, he has the perfect bagman. Equipped with a brilliant financial mind and a penchant for absorbing and retaining vast quantities of information down to minute detail, York knows the "numbers" side of the car business as well as anyone. He also had a career that, at best, has amounted to unfinished business in the auto industry. And with Kerkorian providing the magical elixir of financial horsepower, York is allowed to flex his cerebral muscles and demonstrate to everyone that he knows his stuff - and that if just given the chance he will prove to the world that he is not only the Greatest Automobile Financial Mind of All Time, but that he could run a car company better than anyone out there too. Unfulfilled aspirations can be a powerful longing, and for York, they have become an obsession that will not be quenched Ð unless and until he can put his personal stamp on an auto company.
And in Ghosn, Kerkorian and York have discovered a compadre in runaway ego, self-importance and delusions of grandeur. Ghosn is the hatchet man who literally dismantled Nissan and then resurrected it from the ashes. He engineered such a spectacular turnaround for the company through relentless cost cutting that he became a folk hero in Japanese business circles. He was so canonized by the media both here and in Japan that he was given Renault to run too - the only executive in automotive history who has been charged with running two major auto companies at the same time - and the only auto executive in history with the ego to suggest that it was only fitting. But there are two things to keep reminding yourself about Ghosn in the euphoria that surrounds him: 1. There is no art or brilliance involved in cost cutting - rather, it's a blunt instrument, an accelerated means to an end. And 2. Ghosn achieved virtually everything he did in the U.S. market because of a product renaissance that was well underway before he even got rolling at Nissan in Tokyo. In short, he did it on the backs of OPT (Other People's Talent).
Is it ironic that Nissan is having serious trouble right now in the U.S. market? No, it isn't. Engineering turnarounds through rampant cost cutting is all Ghosn really knows. Once the turnaround is accomplished, Ghosn is clearly out of productive ideas, sort of a one-trick pony with an inflated pedigree. This has been clearly and convincingly demonstrated in his disastrous move to relocate Nissan's U.S. headquarters to Nashville from Southern California - its spiritual home - in the interests of accomplishing even more cost cutting. Because in doing so he has decimated the organization and sent the majority of its talent packing. In this regard, he is such an impeccable fit with Kerkorian and York it's scary. To Ghosn, the bottom line rules over talent, ability and organizational chemistry every single time. The end justifies the means - especially if it propels his stature as a corporate icon and fuels his already considerable ego even further. And if he gets a crack at running GM, his legacy will be etched in stone.
And so here we are. Three Amigos with a half-baked "Plan" with no real rhyme or reason to it other than to take over GM. And let me be real clear on this next point - there is nothing "alliance" or "partnership" about any of this discussion, either. Kerkorian and York want to be known as the guys who swooped in and took over an American corporate icon and an untouchable piece of America's industrial history - a heretofore unfathomable notion. And with Ghosn, they have just the front man to drive their "vision" - the guy whom York considers to be the finest automotive executive talent out there - other than himself, of course.
But would this takeover even work? Let me put it this way, if the DaimlerChrysler "merger" is still a work in progress after eight years - with the Germans floundering and stumbling around still trying to figure out how to extract the most out of their counterparts' "American" culture while imposing their "superior" way on everything, then attempting to blend three desperately different corporate cultures like GM, Nissan and Renault would be an unmitigated disaster.
Forget about the vaunted synergies and cost savings running through York and Ghosn's brains, because we're talking about a corporate culture train wreck of gigantic proportions, an organizational nightmare that would take a decade to sort out - and that's probably being wildly optimistic, at best.
So where does that leave Rick Wagoner and his team at GM? Probably pissed-off and fighting mad, for starters. And well they should be. I've been highly critical of Rick Wagoner in the past, but I also have had to grudgingly acknowledge of late that his maneuverings are on the right track. I am concerned about the pace of events and the looming 2007 contract talks with the crippled UAW, but nonetheless I have to give Rick his due, he is focused on engineering a turnaround in the "right" way - and I see real, demonstrative progress.
When I say the "right" way, I mean that Rick Wagoner has always tried to take into account the constituencies involved and those who are inexorably invested in the future of GM. There are literally hundreds of thousands of people - generations of families - who have made their livelihoods working for General Motors. And the challenges facing GM in health care costs, pensions and global competitiveness are challenges facing corporate America and our nation as a whole. Rick and his team are trying to do what's right for everyone involved the right way. There are no shortcuts or instant fixes available. It's a gradual and more often than not an excruciatingly painful progress.
But for Kerkorian, it has never been about what's right - it's only about right now. It's not about what's best for the people or the companies involved - it's about what's best for Kerkorian and his neverending quest to accumulate "the zeroes" on his corporate financial statements. The guy loves the smell of financial turmoil in the morning - especially if he's the cause of it. And with York and now Ghosn doing his bidding, Kerkorian is now gloating that he has sent the markets into a tizzy, rattled Rick Wagoner and his team's cage and oh by the way, just so happened to send GM's stock soaring - to his immense benefit and glee.
Is there any real surprise in all of this? No. Kerkorian has never operated any other way throughout his life, that's why when he made this "play" in GM stock, I knew that one day, it would be a big bowl of Not Good for GM. And so here we are.
Kerkorian + York + Ghosn is a formula for disaster for General Motors. I see no reason to sugarcoat that fact. These mercenaries will destroy everything in their path to get what they want - at 89 years old, Kerkorian gets to play The Game a little longer, York gets the respect he has hungered so long for, and Ghosn gets to inflate his runaway ego even further.
And if an American icon gets destroyed in the process, then so be it.
Thanks for listening, see you next Wednesday.
Kerkorian + York + Ghosn = Disaster for General Motors.
Detroit. Anyone who actually believed that Kirk Kerkorian and his designated spear-carrier, Jerry York, had benevolent intentions with their "investment" in General Motors had their attitude adjusted Friday afternoon (June 30) when the two roving quick-buck aficionados revealed their "Plan" to GM (and of course, the media) - which amounts to demanding that GM consider a linkage with Renault SA and Nissan. And it was also revealed that the two had even gone so far as to have secret meetings with Carlos Ghosn, the diminutive megalomaniac and dual CEO of Nissan and Renault, who was looking for another ego boost, apparently - to float their proposal and get his buy-in.
Make no mistake - this isn't about creating a new global automotive powerhouse well-equipped to do battle deep into this century, one that will keep Toyota from taking over the world. And this certainly isn't about doing what's best for General Motors and the people who have so much invested in the fortunes of the company. And this in no way, shape or form has anything to do with solidifying America's manufacturing base or shoring up the economy.
No, this is about flat-out greed, pure and simple.
It's about spiking the stock, roiling the markets and getting the media worked up. Forget the noble intentions espoused by York early on, that he and Kerkorian were just trying to get GM reshaped and on-track for survival so that it could thrive in the future. Forget about all the genuine concern that York spoke about in his speech to the investment community in Detroit last January - that he knew what GM needed to do to become a healthy industry player for years to come, if they'd only listen. No, this is about getting Kerkorian's investment going in the right direction as soon as possible - and if they have to set up a logistical nightmare of an "alignment" to get their financial return jacked-up asap, then they're going to do what they have to do.
And the three "players" involved here just happen to be the Three Amigos of Greed, Unfulfilled Aspirations - and Ego.
Kirk Kerkorian, the multi-billionaire "investor," isn't just about making money. Because if it were just about the money he would have retired to his tennis games long ago, he has so much of it. No, Kerkorian likes to not only make money; he likes to mess with people and companies in the process. His intentions are as transparent as they are malevolent. It's The Game that he thrives on. Period.
And in Jerry York, he has the perfect bagman. Equipped with a brilliant financial mind and a penchant for absorbing and retaining vast quantities of information down to minute detail, York knows the "numbers" side of the car business as well as anyone. He also had a career that, at best, has amounted to unfinished business in the auto industry. And with Kerkorian providing the magical elixir of financial horsepower, York is allowed to flex his cerebral muscles and demonstrate to everyone that he knows his stuff - and that if just given the chance he will prove to the world that he is not only the Greatest Automobile Financial Mind of All Time, but that he could run a car company better than anyone out there too. Unfulfilled aspirations can be a powerful longing, and for York, they have become an obsession that will not be quenched Ð unless and until he can put his personal stamp on an auto company.
And in Ghosn, Kerkorian and York have discovered a compadre in runaway ego, self-importance and delusions of grandeur. Ghosn is the hatchet man who literally dismantled Nissan and then resurrected it from the ashes. He engineered such a spectacular turnaround for the company through relentless cost cutting that he became a folk hero in Japanese business circles. He was so canonized by the media both here and in Japan that he was given Renault to run too - the only executive in automotive history who has been charged with running two major auto companies at the same time - and the only auto executive in history with the ego to suggest that it was only fitting. But there are two things to keep reminding yourself about Ghosn in the euphoria that surrounds him: 1. There is no art or brilliance involved in cost cutting - rather, it's a blunt instrument, an accelerated means to an end. And 2. Ghosn achieved virtually everything he did in the U.S. market because of a product renaissance that was well underway before he even got rolling at Nissan in Tokyo. In short, he did it on the backs of OPT (Other People's Talent).
Is it ironic that Nissan is having serious trouble right now in the U.S. market? No, it isn't. Engineering turnarounds through rampant cost cutting is all Ghosn really knows. Once the turnaround is accomplished, Ghosn is clearly out of productive ideas, sort of a one-trick pony with an inflated pedigree. This has been clearly and convincingly demonstrated in his disastrous move to relocate Nissan's U.S. headquarters to Nashville from Southern California - its spiritual home - in the interests of accomplishing even more cost cutting. Because in doing so he has decimated the organization and sent the majority of its talent packing. In this regard, he is such an impeccable fit with Kerkorian and York it's scary. To Ghosn, the bottom line rules over talent, ability and organizational chemistry every single time. The end justifies the means - especially if it propels his stature as a corporate icon and fuels his already considerable ego even further. And if he gets a crack at running GM, his legacy will be etched in stone.
And so here we are. Three Amigos with a half-baked "Plan" with no real rhyme or reason to it other than to take over GM. And let me be real clear on this next point - there is nothing "alliance" or "partnership" about any of this discussion, either. Kerkorian and York want to be known as the guys who swooped in and took over an American corporate icon and an untouchable piece of America's industrial history - a heretofore unfathomable notion. And with Ghosn, they have just the front man to drive their "vision" - the guy whom York considers to be the finest automotive executive talent out there - other than himself, of course.
But would this takeover even work? Let me put it this way, if the DaimlerChrysler "merger" is still a work in progress after eight years - with the Germans floundering and stumbling around still trying to figure out how to extract the most out of their counterparts' "American" culture while imposing their "superior" way on everything, then attempting to blend three desperately different corporate cultures like GM, Nissan and Renault would be an unmitigated disaster.
Forget about the vaunted synergies and cost savings running through York and Ghosn's brains, because we're talking about a corporate culture train wreck of gigantic proportions, an organizational nightmare that would take a decade to sort out - and that's probably being wildly optimistic, at best.
So where does that leave Rick Wagoner and his team at GM? Probably pissed-off and fighting mad, for starters. And well they should be. I've been highly critical of Rick Wagoner in the past, but I also have had to grudgingly acknowledge of late that his maneuverings are on the right track. I am concerned about the pace of events and the looming 2007 contract talks with the crippled UAW, but nonetheless I have to give Rick his due, he is focused on engineering a turnaround in the "right" way - and I see real, demonstrative progress.
When I say the "right" way, I mean that Rick Wagoner has always tried to take into account the constituencies involved and those who are inexorably invested in the future of GM. There are literally hundreds of thousands of people - generations of families - who have made their livelihoods working for General Motors. And the challenges facing GM in health care costs, pensions and global competitiveness are challenges facing corporate America and our nation as a whole. Rick and his team are trying to do what's right for everyone involved the right way. There are no shortcuts or instant fixes available. It's a gradual and more often than not an excruciatingly painful progress.
But for Kerkorian, it has never been about what's right - it's only about right now. It's not about what's best for the people or the companies involved - it's about what's best for Kerkorian and his neverending quest to accumulate "the zeroes" on his corporate financial statements. The guy loves the smell of financial turmoil in the morning - especially if he's the cause of it. And with York and now Ghosn doing his bidding, Kerkorian is now gloating that he has sent the markets into a tizzy, rattled Rick Wagoner and his team's cage and oh by the way, just so happened to send GM's stock soaring - to his immense benefit and glee.
Is there any real surprise in all of this? No. Kerkorian has never operated any other way throughout his life, that's why when he made this "play" in GM stock, I knew that one day, it would be a big bowl of Not Good for GM. And so here we are.
Kerkorian + York + Ghosn is a formula for disaster for General Motors. I see no reason to sugarcoat that fact. These mercenaries will destroy everything in their path to get what they want - at 89 years old, Kerkorian gets to play The Game a little longer, York gets the respect he has hungered so long for, and Ghosn gets to inflate his runaway ego even further.
And if an American icon gets destroyed in the process, then so be it.
Thanks for listening, see you next Wednesday.
07-04-06, 11:48 PM
#43
Originally Posted by Pearlpower
HA HA, that's the thing. I did not know. I had a cold at the time and not till days later did someone tell me. Once my sniffer came back I knew. Been to too many concerts not to know. Plus I ended up in an accident with the thing (5 car on 10 freeway) and chased down the hit and run lady in her Accord. I was sweating when the CHP showed up as I did not want them to sniff it too. Can you imagine me expaining that one to them? "Ummm, yeah right sir, get in the back of my patrol car please. "
And before anyone says that pot and GM is not the same subject, look at some of their cars. They must be smok'n.!
Can you imagine me expaining that one to them? "Ummm, yeah right sir, get in the back of my patrol car please. "And before anyone says that pot and GM is not the same subject, look at some of their cars. They must be smok'n.!
but back to GM. i think image is indeed a big problem to them as well, on top of their quality and what not. other brands out there, they have their image, i can name what kind of cars they make, what are they after, some model names, etc... but for GM, i don't know what they are doing, where they are heading. all i know is how hard they are trying to survive, how long they have been losing money. that's really tough on them
07-06-06, 06:50 AM
#44
Super Moderator
GM-Nissan Saga: Ghosn and Wagoner Set Motown Meeting for Partnership Talks
Date posted: 07-05-2006
DETROIT — Carlos Ghosn, CEO of Renault and Nissan, is scheduled to meet his General Motors counterpart, Rick Wagoner, later this month in Detroit further fueling hopes in the financial community that a profitable alliance will eventually be reached.
It has also been confirmed in numerous reports that GM's chief financial officer, Fritz Henderson, is heading up a project to examine the existing Renault/Nissan alliance to assess the potential benefits for GM if it joined. GM's board of directors will meet this Friday via teleconference and discuss the possible alliance.
In Japan, the Nihon Keizai Shimbun business daily said Nissan and Renault were studying three areas of possible cooperation with the General: parts procurement, environmental technology and safety technology.
GM's high-profile shareholder, billionaire Kirk Kerkorian, has proposed that GM management begin exploring a potential alliance with Renault/Nissan.
Wall Street continues to be smitten by the idea of a GM/Nissan alliance, with virtually every investment brokerage either raising GM's outlook rating or placing the stock on watch for possible upgrade. GM's stock was trading at $29.40 in midday trading Wednesday, up sharply from recent lows of around $19 in early May.
What this means to you: The mega-alliance appears to take a step closer to reality with this July powwow.
source : edmunds
DETROIT — Carlos Ghosn, CEO of Renault and Nissan, is scheduled to meet his General Motors counterpart, Rick Wagoner, later this month in Detroit further fueling hopes in the financial community that a profitable alliance will eventually be reached.
It has also been confirmed in numerous reports that GM's chief financial officer, Fritz Henderson, is heading up a project to examine the existing Renault/Nissan alliance to assess the potential benefits for GM if it joined. GM's board of directors will meet this Friday via teleconference and discuss the possible alliance.
In Japan, the Nihon Keizai Shimbun business daily said Nissan and Renault were studying three areas of possible cooperation with the General: parts procurement, environmental technology and safety technology.
GM's high-profile shareholder, billionaire Kirk Kerkorian, has proposed that GM management begin exploring a potential alliance with Renault/Nissan.
Wall Street continues to be smitten by the idea of a GM/Nissan alliance, with virtually every investment brokerage either raising GM's outlook rating or placing the stock on watch for possible upgrade. GM's stock was trading at $29.40 in midday trading Wednesday, up sharply from recent lows of around $19 in early May.
What this means to you: The mega-alliance appears to take a step closer to reality with this July powwow.
source : edmunds
07-06-06, 07:38 AM
#45
Super Moderator
Skepticism over GM megadeal mounts . . .
Analysts raise questions about viability of global alliance with Renault-Nissan
Bill Vlasic and Christine Tierney / The Detroit News
Thursday, July 06, 2006
While a high-level team at General Motors Corp. races to study a potential GM-Renault-Nissan alliance, questions are being raised about the viability of the proposed three-way partnership.
GM's board will meet Friday to consider a plan by billionaire investor Kirk Kerkorian to link GM with Renault SA of France and Japan's Nissan Motor Co. -- whose boards already have approved entering formal talks with GM.
GM's preparations are also geared toward a pivotal meeting, first reported by The Detroit News, July 14 between GM Chairman Rick Wagoner and Carlos Ghosn, CEO of Renault and Nissan.
As GM Chief Financial Officer Fritz Henderson and the automaker's investment banks rush to critique the idea before GM's board meeting, the wisdom of a trilateral deal is being questioned in the United States, France and Japan.
Several Wall Street analysts have already raised doubts about tying GM to Renault-Nissan.
"We do not think a Renault-Nissan-GM combination has fundamental long-term merit, but this does not mean it will not happen," said Ronald Tadross of Bank of America.
In France, a top official of the government -- which represents the state's 15 percent stake in Renault -- was quoted by news agencies as urging caution before tying Renault-Nissan to struggling GM, which lost $10.6 billion in 2005.
"This has to be approached with enormous caution," said French Industry Minister Francois Loos. "The United States is an immense market, a complicated market, and General Motors is in a difficult situation because of problems that have nothing to do with cars."
Japanese auto analysts were also questioning whether Ghosn could solve GM's problems.
The Brazilian-born French executive has an excellent record turning ailing companies around, transforming Nissan from a near-bankrupt automaker to one of the industry's most profitable manufacturers in less than three years.
But, said Noriyuki Matsushima, of Nikko Citigroup in Tokyo, "there is no guarantee that just because Nissan succeeded, an attempt to turn GM around would succeed."
GM execs among doubters
Skepticism over the merits of a mega-alliance between GM, Renault and Nissan is also pervasive in the executive offices at GM, according to company insiders. The company recently paid $2 billion to extricate itself from a souring partnership with Fiat Auto of Italy. And it sold small stakes in Japanese automakers after the partnerships failed to help GM in Japan.
The courtship of Renault-Nissan was initiated by Kerkorian, who owns 9.9 percent of GM, and Jerry York, Kerkorian's top adviser and a GM board member.
Kerkorian shocked the auto world on June 30 by taking his plan public in filings with the U.S. Securities and Exchange Commission.
Since then, GM executives have been scrambling to analyze whether the automaker could benefit from joining Renault-Nissan.
Henderson, who took over as GM's CFO in January, is heading a study group that includes finance specialists from the automaker's treasurer's office in New York.
Renault-Nissan may form bloc
In addition, GM's outside investment banks are also helping to compile data on Renault-Nissan in advance of Friday's board meeting.
"It's not unusual that we would ask our bank advisers to help gather facts and provide analysis when you're looking at such a complicated transaction," said GM official Toni Simonetti.
GM's directors will meet by conference call Friday to discuss Kerkorian's proposal that a board committee be formed "immediately" to study a deal with Renault-Nissan.
People close to the discussions say Renault and Nissan would be prepared to jointly invest $3 billion in GM, with each company taking a 10 percent stake. That would establish a 30 percent shareholding bloc in GM, by far the largest in the U.S. automaker.
Ghosn touts advantages
Kerkorian's main objective appears to be to bring in Ghosn to speed up a restructuring of GM. People close to Kerkorian say he is dissatisfied with the pace of GM's recovery even though Wagoner has concluded landmark cost-cutting accords with the United Auto Workers union and deals to sell assets, such as GM's finance arm GMAC. Wagoner has laid out plans to downsize U.S. operations and is on track to cut 30,000 jobs two years ahead of schedule.
According to the French newspaper Le Figaro, Ghosn presented a strong case for a three-way partnership at Renault's board meeting Monday, describing the potential clout of the group and cost-saving opportunities.
In a prior meeting with Kerkorian and York, Ghosn said Nissan might be able to use some of GM's idle light-truck production capacity in North America as it expands its truck lineup.
GM executives might argue bringing in new investors and managers could have the opposite effect of distracting management from the recovery plan and a raft of upcoming model launches.
Together, the three companies' vehicle sales account for a quarter of the global market. Analysts see big potential gains in combining their purchasing programs as well as safety and environment technology development.
"The fact that Renault and Nissan CEO Mr. Ghosn would ever entertain the idea of a link-up with GM indicates that a sound business case can be made," said Merrill Lynch analyst Stephen Reitman.
"Arguably no other automotive CEO has as finely tuned antennae as to the trends and opportunities in the industry."
Rivals monitor progress
Other carmakers, including Toyota Motor Corp., are watching the developments closely because such an alliance would transform the industry landscape.
Reitman reiterated a buy recommendation for Renault shares in a report but forecast a bumpy ride as investors weigh the pluses of such an alliance against the potential minuses. DaimlerChrysler CEO Dieter Zetsche said Wednesday it takes years to see the benefits of cross-border deals.
"Every M&A guy will give you billions of synergies if you even think about any kind of alliance," Zetsche told reporters in Tokyo. "In the real world, it's somewhat tougher."
Analysts point out that GM is saddled with enormous problems that are very different from what Ghosn found at Nissan.
"The cost-saving opportunities at Nissan were far greater," said Rob Hinchliffe, analyst at UBS Investment Research said in a report. In 1999, Nissan had many assets that could be put up for sale. Secondly, Renault was in charge of the Japanese automaker after buying a controlling stake and Ghosn could put his cost-cutting plan into effect.
He sees fewer benefits, particularly in the near term, of a three-way alliance. "GM's purchasing cost are likely already competitive."
Renault and Nissan seem likely to benefit from GM's large presence in Latin America, Russia and in China, where it is one of the leading foreign automakers.
In a report illustrating how difficult it is to generate tangible benefits from an alliance, Merrill Lynch's Asia analyst Grace Pak says the potential savings in China will be limited by the fact that Renault-Nissan and GM have different Chinese venture partners, with different suppliers.
source : detnews
Bill Vlasic and Christine Tierney / The Detroit News
Thursday, July 06, 2006
While a high-level team at General Motors Corp. races to study a potential GM-Renault-Nissan alliance, questions are being raised about the viability of the proposed three-way partnership.
GM's board will meet Friday to consider a plan by billionaire investor Kirk Kerkorian to link GM with Renault SA of France and Japan's Nissan Motor Co. -- whose boards already have approved entering formal talks with GM.
GM's preparations are also geared toward a pivotal meeting, first reported by The Detroit News, July 14 between GM Chairman Rick Wagoner and Carlos Ghosn, CEO of Renault and Nissan.
As GM Chief Financial Officer Fritz Henderson and the automaker's investment banks rush to critique the idea before GM's board meeting, the wisdom of a trilateral deal is being questioned in the United States, France and Japan.
Several Wall Street analysts have already raised doubts about tying GM to Renault-Nissan.
"We do not think a Renault-Nissan-GM combination has fundamental long-term merit, but this does not mean it will not happen," said Ronald Tadross of Bank of America.
In France, a top official of the government -- which represents the state's 15 percent stake in Renault -- was quoted by news agencies as urging caution before tying Renault-Nissan to struggling GM, which lost $10.6 billion in 2005.
"This has to be approached with enormous caution," said French Industry Minister Francois Loos. "The United States is an immense market, a complicated market, and General Motors is in a difficult situation because of problems that have nothing to do with cars."
Japanese auto analysts were also questioning whether Ghosn could solve GM's problems.
The Brazilian-born French executive has an excellent record turning ailing companies around, transforming Nissan from a near-bankrupt automaker to one of the industry's most profitable manufacturers in less than three years.
But, said Noriyuki Matsushima, of Nikko Citigroup in Tokyo, "there is no guarantee that just because Nissan succeeded, an attempt to turn GM around would succeed."
GM execs among doubters
Skepticism over the merits of a mega-alliance between GM, Renault and Nissan is also pervasive in the executive offices at GM, according to company insiders. The company recently paid $2 billion to extricate itself from a souring partnership with Fiat Auto of Italy. And it sold small stakes in Japanese automakers after the partnerships failed to help GM in Japan.
The courtship of Renault-Nissan was initiated by Kerkorian, who owns 9.9 percent of GM, and Jerry York, Kerkorian's top adviser and a GM board member.
Kerkorian shocked the auto world on June 30 by taking his plan public in filings with the U.S. Securities and Exchange Commission.
Since then, GM executives have been scrambling to analyze whether the automaker could benefit from joining Renault-Nissan.
Henderson, who took over as GM's CFO in January, is heading a study group that includes finance specialists from the automaker's treasurer's office in New York.
Renault-Nissan may form bloc
In addition, GM's outside investment banks are also helping to compile data on Renault-Nissan in advance of Friday's board meeting.
"It's not unusual that we would ask our bank advisers to help gather facts and provide analysis when you're looking at such a complicated transaction," said GM official Toni Simonetti.
GM's directors will meet by conference call Friday to discuss Kerkorian's proposal that a board committee be formed "immediately" to study a deal with Renault-Nissan.
People close to the discussions say Renault and Nissan would be prepared to jointly invest $3 billion in GM, with each company taking a 10 percent stake. That would establish a 30 percent shareholding bloc in GM, by far the largest in the U.S. automaker.
Ghosn touts advantages
Kerkorian's main objective appears to be to bring in Ghosn to speed up a restructuring of GM. People close to Kerkorian say he is dissatisfied with the pace of GM's recovery even though Wagoner has concluded landmark cost-cutting accords with the United Auto Workers union and deals to sell assets, such as GM's finance arm GMAC. Wagoner has laid out plans to downsize U.S. operations and is on track to cut 30,000 jobs two years ahead of schedule.
According to the French newspaper Le Figaro, Ghosn presented a strong case for a three-way partnership at Renault's board meeting Monday, describing the potential clout of the group and cost-saving opportunities.
In a prior meeting with Kerkorian and York, Ghosn said Nissan might be able to use some of GM's idle light-truck production capacity in North America as it expands its truck lineup.
GM executives might argue bringing in new investors and managers could have the opposite effect of distracting management from the recovery plan and a raft of upcoming model launches.
Together, the three companies' vehicle sales account for a quarter of the global market. Analysts see big potential gains in combining their purchasing programs as well as safety and environment technology development.
"The fact that Renault and Nissan CEO Mr. Ghosn would ever entertain the idea of a link-up with GM indicates that a sound business case can be made," said Merrill Lynch analyst Stephen Reitman.
"Arguably no other automotive CEO has as finely tuned antennae as to the trends and opportunities in the industry."
Rivals monitor progress
Other carmakers, including Toyota Motor Corp., are watching the developments closely because such an alliance would transform the industry landscape.
Reitman reiterated a buy recommendation for Renault shares in a report but forecast a bumpy ride as investors weigh the pluses of such an alliance against the potential minuses. DaimlerChrysler CEO Dieter Zetsche said Wednesday it takes years to see the benefits of cross-border deals.
"Every M&A guy will give you billions of synergies if you even think about any kind of alliance," Zetsche told reporters in Tokyo. "In the real world, it's somewhat tougher."
Analysts point out that GM is saddled with enormous problems that are very different from what Ghosn found at Nissan.
"The cost-saving opportunities at Nissan were far greater," said Rob Hinchliffe, analyst at UBS Investment Research said in a report. In 1999, Nissan had many assets that could be put up for sale. Secondly, Renault was in charge of the Japanese automaker after buying a controlling stake and Ghosn could put his cost-cutting plan into effect.
He sees fewer benefits, particularly in the near term, of a three-way alliance. "GM's purchasing cost are likely already competitive."
Renault and Nissan seem likely to benefit from GM's large presence in Latin America, Russia and in China, where it is one of the leading foreign automakers.
In a report illustrating how difficult it is to generate tangible benefits from an alliance, Merrill Lynch's Asia analyst Grace Pak says the potential savings in China will be limited by the fact that Renault-Nissan and GM have different Chinese venture partners, with different suppliers.
source : detnews