[Marxism] New global monopoly "alliance" ?

Charles Brown cbrown at michiganlegal.org
Sat Jul 8 16:12:30 MDT 2006


What's good for GM is good for America, France and Japan ?

Charles
 


	
<http://vh10924.moc.gbahn.net/apps/pbcsi.dll/bilde?Site=C3&Date=20060708&Cat
egory=AUTO01&ArtNo=607080340&Ref=V2Q=100&MaxW=500> 

	Robin Buckson / The Detroit News

	By empowering Rick Wagoner as point man in talks regarding an
alliance, the GM board temporarily defused speculation that he is in danger
of being replaced by Renault-Nissan CEO Carlos Ghosn.

GM takes 1st step

Wagoner: Heads alliance talks; Kerkorian: Wants independent review; Board:
Urges focus on turnaround

Bill Vlasic and Christine Tierney / The Detroit News



  
What happened: 

*	GM's board said the company will begin "exploratory talks" with
Renault and Nissan on a possible alliance. 

*	The board said CEO Rick Wagoner would lead the study and reiterated
its support for his turnaround plan. 

*	Kirk Kerkorian's investment firm aid it was "pleased" at the board's
action, but wants the board to study the alliance with the help of
independent advisers. 


  

DETROIT -- The board of General Motors Corp. on Friday empowered Chairman
Rick Wagoner to lead the automaker's upcoming talks on a potentially
historic global alliance with Renault SA and Nissan Motor Co.

Activist shareholder Kirk Kerkorian welcomed the decision as a "good first
step," but wasn't entirely satisfied. He pressed the GM board Friday to form
its own committee and hire outside advisers to help evaluate an alliance
with Renault-Nissan.

By naming Wagoner as its point man in the talks and reiterating support for
his North American turnaround plan, the GM board temporarily defused
speculation that the embattled chairman is in danger of being replaced by
Renault and Nissan's CEO Carlos Ghosn.

The next major step comes next Friday when Wagoner and Ghosn are scheduled
to meet face to face in Detroit. But given the complexity of the deal,
discussions and analysis could play out over weeks or months.

Questions have abounded about how Wagoner would react to the unsolicited
invitation to join Renault-Nissan that was hatched in secret by Kerkorian,
Ghosn and Jerry York, a GM director and key adviser to Kerkorian.

Rather than attack the proposal, Wagoner recommended to the GM board that he
take the lead in studying the deal "in order to assist the board in its
decision-making," GM said in a statement after the hour-and-20-minute
meeting Friday.

"Management will keep the board well-informed and the directors, of course,
will closely monitor the process to assure that its outcome serves the best
interest of all GM shareholders," said George Fisher, who serves as the
board's lead outside director.

The reference to "all GM shareholders" was clearly directed at Kerkorian,
who has used his 9.9 percent stake in GM to prod the automaker to accelerate
its turnaround efforts and consider a megadeal with Renault-Nissan.

The GM board said Friday the move to "engage in exploratory discussions"
with Renault-Nissan was "taken in response" to a direct request made by
Kerkorian through his Tracinda Corp. investment arm.

But the board stopped short of giving in to Kerkorian's June 30 demand that
the directors immediately form a committee to study a linkup with
Renault-Nissan.

Tracinda, in a statement, said it was "pleased" with the GM board's decision
to open talks with Renault-Nissan but urged the board to review the deal
independently.

"We believe that the upcoming meeting between Mr. Wagoner and Mr. Ghosn is a
good first step," Tracinda said. "But a full and objective evaluation of
this unique opportunity will require establishment of a board committee that
receives independent financial and legal advice."

Nissan and Renault welcomed the GM board's decision. "We're pleased they're
open to discussions, and the process starts now," said Nissan spokesman
Simon Sproule.

Wagoner, for his part, characterized Kerkorian's Renault-Nissan initiative
as among the "interesting proposals" that GM receives periodically about
potential mergers, acquisitions or alliances.

He noted that GM has considerable experience in international alliances,
without mentioning that some previous deals have gone badly. Last year, GM
paid $2 billion to get out of a disastrous partnership with Italy's Fiat
Auto. It also recently sold stakes in Japan's Suzuki and Fuji Heavy
Industries.

"We will enter into discussions with the managements of Renault and Nissan
with an open mind," Wagoner said in the statement.

But he cautioned that any deal will take time and an extraordinary amount of
due diligence. "Given the complexity of any potential relationship, it has
to be carefully considered on its merits before coming to any conclusion."

The delicate nature of the upcoming talks was underscored by comments made
Friday by Ron Gettelfinger, president of the United Auto Workers. The union
recently saw 47,000 of its members take buyouts or early retirements at GM
and bankrupt auto-parts maker Delphi Corp.

"We're seeing a further erosion of good jobs in this country should this
(deal) come about," Gettelfinger said in an interview with WJR-AM radio.
"The entire complexion of the auto industry in the future will be determined
by this."

Gettelfinger expressed his support for Wagoner and said he didn't think GM
would ultimately join an alliance with Renault-Nissan.

"I don't think it will come about in the final analysis," he said. "I think
Rick Wagoner is doing a great job and has a great team."

Earlier this week, the boards of Renault and Nissan endorsed Ghosn's
proposal to begin discussions with GM to explore a three-way alliance but
said they would not press further unless GM was willing. "The conditions are
now in place to start talks," Renault said in a statement Friday.

"We look forward to starting the discussion process soon," Nissan said in a
similarly worded statement.

Renault holds a controlling stake in Nissan, which it purchased in 1999 when
the Japanese automaker was in deep financial difficulty. The charismatic
Ghosn led a dramatic turnaround at Nissan, and has since taken on the
additional responsibility of CEO at Renault.

His track record drew the interest of Kerkorian and York, who held secret
meetings with Ghosn in May and June to discuss a possible alliance with GM.

After York made a case to Wagoner about the potential deal on June 22, the
GM chairman called Ghosn and set up a face-to-face meeting for Friday.

Details of the meeting were first reported in The Detroit News on Tuesday.
After the board meeting Friday, GM for the first time confirmed the
Wagoner-Ghosn telephone conversation and the upcoming meeting.

"Wagoner noted that when the idea of joining an alliance with Renault and
Nissan was first suggested to him, he promptly contacted Carlos Ghosn and
the two leaders agreed to meet at a mutually convenient time to have an
initial exploratory discussion," GM said.

People close to GM say the automaker has already formed an internal task
force to study the vast implications of a partnership with Renault-Nissan.
Some members of GM management have privately expressed deep reservations
about the deal.

Similar teams are being assembled at Renault and Nissan, according to people
familiar with the companies.

Wall Street reacted cautiously Friday to the news that Wagoner will open
talks with Renault-Nissan. GM shares closed at $29.48, up 28 cents.

"We believe that due diligence on a potential alliance between General
Motors and Renault is at a very preliminary stage, and it is not yet
possible to assign a probability of a deal," said Rod Lache, an auto analyst
at Deutsche Bank.

The GM board's move to back Wagoner was significant given the avalanche of
criticism directed at him since the automaker lost $10.6 billion last year.

Moreover, the board took the opportunity to voice its confidence in
Wagoner's plan to turn around GM by shedding 30,000 U.S. factory jobs,
selling control of its auto-finance business and helping Delphi emerge from
bankruptcy.

"The board continues to fully support the company's North American
turnaround strategy," said Fisher. "And we encourage management to also
continue its efforts to conclude a satisfactory resolution of the issues
associated with the Delphi bankruptcy and to complete the pending GMAC
transaction."

One analyst said the board's support of Wagoner -- after giving him a public
vote of confidence in April -- marks a turning point for the 53-year-old
chairman.

"Wagoner has never been stronger," said David Healy of Burnham Securities.
"In my judgment, he's bringing about the first successful restructuring at
GM since the company was formed in 1918."

You can reach Bill Vlasic at (313) 222-2152 or bvlasic at detnews.com.


Related links

 Can a charismatic CEO save GM?
<http://abcnews.go.com/WNT/story?id=2166206&page=1>  ABC News interviews
Detroit News columnist Daniel Howes and others 
 Heat's on GM board
<http://detnews.com/apps/pbcs.dll/article?AID=/20060707/AUTO01/607070332> 
Daniel Howes: Politicians worry deal will hurt state
<http://detnews.com/apps/pbcs.dll/article?AID=/20060707/AUTO02/607070333>  
 Daniel Howes: We want to know, Kerkorian, what's your vision for GM?
<http://detnews.com/apps/pbcs.dll/article?AID=/20060705/AUTO02/607050302/114
8/AUTO01> 
 Neil Winton: European Perspective: Three-way deal with GM, Renault and
Nissan gets thumbs down In Europe
<http://detnews.com/apps/pbcs.dll/article?AID=/20060705/AUTO02/607050402/114
8/AUTO01> 
 Why Kerkorian pulled GM trigger
<http://detnews.com/apps/pbcs.dll/article?AID=/20060704/AUTO01/607040347/114
8/AUTO01> 
 Renault, Nissan: We'll welcome GM overtures
<http://detnews.com/apps/pbcs.dll/article?AID=/20060704/AUTO01/607040341/114
8> 
 Renault, GM weigh risk-laden megadeal
<http://detnews.com/apps/pbcs.dll/article?AID=/20060703/AUTO01/607030362/114
8> 
 Daniel Howes: Is megadeal opportunity or mess?
<http://detnews.com/apps/pbcs.dll/article?AID=/20060701/AUTO02/607010367/114
8/AUTO01> 
 Global stunner: Link GM, Renault-Nissan
<http://detnews.com/apps/pbcs.dll/article?AID=/20060701/AUTO01/607010372/114
8/AUTO01> 
 Renault-Nissan alliance among most successful
<http://detnews.com/apps/pbcs.dll/article?AID=/20060701/AUTO01/607010371/114
8/AUTO01> 
 Is GM ultimate risk for Kerkorian?
<http://detnews.com/apps/pbcs.dll/article?AID=/20060701/AUTO01/607010368/114
8/AUTO01> 
 Industry's reaction
<http://detnews.com/apps/pbcs.dll/article?AID=/20060701/AUTO01/607010369/114
8/AUTO01> 

DocumentsRead the letter from Kirk Kerkorian's investment firm Tracinda to
GM Chairman Richard Wagoner
<http://online.wsj.com/public/resources/documents/filing-tracinda-20060630.p
df>  

 


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*	Corvette plant outshines GM 
*	Auto dealers selling 100,000 careers 

C Copyright 2006 The Detroit News. All rights reserved.

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