Wouldn't you like to be a fly on the wall at GM's board meeting this Friday?
Apparently, that's the company's first chance to sit down at a table and discuss the remarkable turn of events precipitated by Kirk Kerkorian, Jerry York and Tracinda Group over the past week.
A few entries ago, I crapped on the very idea of Nissan/Renault considering an alliance of any kind with General Motors. What, I wondered rhetorically, could GM possibly have to offer Nissan, which has one of the sharpest product portfolios on offer in the country?
Well, as I wipe the egg off my face, I see that Carlos Ghosn, the now-legendary turnaround artist at Nissan/Renault, has been given the OK to pursue buying a 20 percent stake in General Motors. I assume this is attractive largely because of the economies of scale that would come from combined purchasing, and from use of shared platform sets.
But every analyst I've seen writing about this seems to say the same thing: the product overlap here -- especially between Nissan and GM in North America -- is so massive that it would take years to realize any savings from a tie-up, and by then Ghosn might not be the bulletproof master of the universe he's now considered to be. Indeed, sales for Nissan and Renault have started to fall a bit ... and his attention to those pressing matters would be diverted by the massive problems entrenched in Detroit.
I'll add to that the concern you don't see on a balance sheet or a model portfolio: This is the America that brought the phrase "freedom fries" into the lexicon. It's the America where, if you take a casual drive through the streets of Detroit even now, you'll rarely come across a car with an Asian nameplate. How well will GM handle a boss who works for an Asian AND a French car company?
I'll be watching closely to see what GM's board decides to do, what Kerkorian and his manservant York decide in response, and whether Ghosn shows up. Some are writing that Wagoner may be on his way out as of this meeting; that wouldn't surprise me at all, and it wouldn't be the first time that a good guy has failed to come to grips with the octopus of inertia that is GM.
And if I start to hear reports of frost-freeze warnings in Hell, I'll pass 'em along.
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