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Comments
Being simple is not having much to go wrong. I don't understand your logic to the next step. Quit trying to put words into my mouth.
>to go wrong because of how simple they were. Sounds like even you believe they were more reliable
2014 Malibu 2LT, 2015 Cruze 2LT,
Not necessarily, it would depend upon how the deal is structured. My guess is that Renault would provide a package that contributes capital paid in as a combination of debt (loans to GM) and equity (stock purchases/swaps), and that staggers the payments based upon certain services rendered or benchmarks achieved.
I'm not sure what Renault would want out of the deal, but it might be fairly basic stuff, such as access to US distribution channels or plant capacity. For all we know, the focus might be outside the US, perhaps they have some desire to benefit from GM's growing presence in China, for example?
Whatever it is, I wouldn't assume that Renault's goal is to gain access to GMNA's R&D, as have some here. That might be pretty far down the list, if it's on the list at all.
I see your point, but I doubt it. Let's note that Kirkorian owns a large stake of the company, there is absolutely no way that he could dump his stock without the entire market knowing about it very quickly. His stake is so large that any effort on his part to sell large blocks of stock would immediately sink the stock price. He can't just sell off his position to solve this problem.
It comes down to this -- at this pace, GM is headed for bankruptcy, which would leave Kirkorian holding a very large empty bag. (Equity holders come after debt holders, and I've posted above how much debt sits on GM's balance sheet and how selling off most of its primary cash generator, GMAC, puts GM against in a wall if it can't make money by selling cars.)
Someone in Kirkorian's position would be most motivated to lead an ouster of GM senior management, pushing them out the door so that a white knight could infuse cash and other benefits into the company. Ghosn's success in Nissan came largely from driving the development of a few hit cars, either that would sell in large numbers (Altima), improve the brand image (350Z), or generate strong overall margins (G35), to name a few examples. Kirkorian surely must realize that GM needs a similar turnaround plan that doesn't rely on SUV's and rental cars.
My guess is that Kirkorian is trying to engineer a fait accompli (done deal) that creates so much media and analyst momentum that the current GM board and executive officers are powerless to stop it. (The burden is now on them to defend any decision they may make to oppose it.) On the surface, taking a deal with Renault would be such a no-brainer that those who would oppose it, i.e. Rick Wagoner and top officers, would be unable to oppose it without drawing negative attention to themselves and the ire of Wall Street, which could lead to a shareholder revolt.
Should America have more industry and produce more products here? Certainly should do that, but as described, the golden goose got cooked. Between bad decisions by management to build substandard cars back when, having somewhat old looking and feeling product to sell, and union demands for more or everything in life - we now have less. Perhaps a new Ford and GM producing niche cars may keep the names alive. Hard to say. Between Japan and Korea offerings of reliable cars, good warranties, higher resale values, it is looking like they may have a checkmate.
Ford has been able to use Volvo and Mazda to help boost the quality and safety, ride and feel of some of their new cars. Is it enough? I wonder how Volvo is doing now? There is just so much debt though for Ford. GM is swimming in debt too. It doesn't look good.
The one to watch may still be Hyundai. The giant is flexing some muscle now in the car industry. Well if not muscle - brains.
-Loren
chrysler is coming out with the new Challenger in 2008. The last thing I read about the Camaro GM said 2010.And that's why GM will probably never really pull its head out of its a**. :lemon:
Rocky
Rocky
Would be great to see the Prelude, Celica/Supra, and to see the 240SX once again. Hopefully all in RWD. New Hyundai sports car, in RWD, looks pretty wild.
-Loren
With their zero percent 72 month financing, I took a long hard look at all of the models on the list. There is exactly one that holds any appeal for me and I won't likely buy it because it is over-priced.
I think that the main thing here is that the GM execs will have a tough time trying to end run any such proposals, now that the cat is out of the bag. If Renault ends up offering billions in order to bail things out, for whatever reason, what is Wagoner going to say to prevent it? He's on the bad end of a heads-you-win, tails-I-lose situation, because he can't fight it off, yet if he doesn't, he's pretty much looking at collecting unemployment at the end of it.
Unlikely. If one company falls, product demand will be fulfilled by the remaining companies. (It's not as if we're not all going to start walking in the event that GM fails.)
In any case, even if GM went bankrupt, it would almost certainly be reorganized and have a new management team installed that would fix what's left of it. Those who would pay the heaviest price would be the shareholders, the creditors and whatever workers wouldn't be needed in the aftermath.
Perhaps that's Kirkorian's exact motive. Put tons of pressure on the situation to effect an earlier management change. Whether Nissan/Renault actually partners may be less important than changing the GM management.
I'm sure it's part of it, although Kerkorian has a vested interest in making sure that there is a cash infusion from somewhere, and there aren't going to many other players that would be willing to buy in at a relatively high price. (In fact, this may be the only viable buyer within the automotive industry, period.)
With the GMAC cash cow largely parted out and the lackluster vehicle lineup, the only source of cash left is to either borrow it (and with GM's junk status, that won't do a whole lot of good), or else sell off interests in the company in a fashion similar to what is being proposed here.
Kerkorian has complained in the past about an alleged lack of a sense of urgency among the GM management team, so I have little doubt that heads would roll as a result of this -- urgency is exactly what is needed. However, I do wonder whether Ghosn already has his hands full with the Renault turnaround, GM is a larger animal to manage and may prove to be more cumbersome to fix than Nissan was.
"Wagoner's continued faith in what appears to be an era of permanently higher gasoline prices that high-margin but slow-selling Suburbans, Yukons, Tahoes and other houses-on-wheels will come back into favour to power a GM revival, to say nothing of GM's obsession with a niche Hummer whose tiny volume is eclipsed by its dreadful PR impact, is the mark of a chief executive out of touch with the 21st century market."
The comments about the market cap were spot on, I had noticed this as well. This initial offer effectively assigns GM with a total value of $15 billion, which is amazing when you consider that the much smaller Honda has a market cap of about $115 billion. I would expect the amount of the offer to increase -- GM's market cap is about $17 billion, and most deals like this come in at a premium to market -- but still, it's something to see how the mighty have fallen.
But I find this bit flawed:
What GM needs is to get smaller, not larger; and much more focused on North America, rather than maintaining grandiose visions of being a global automaker.
Not sure where that comes from, GM stands to gain from selective growth in emerging markets such as China. And while it should be trimming nameplates and badges in the US, the goal should be to increase sales volumes per nameplate and to regain market share, not to just give it up. Ghosn brought Nissan up by introducing new replacement models, not by abandoning segments, and I see a similar need here.
What happens if someone like Toyota in a year or two just buys out GM and closes it or completely re-works it in their image? There's nothing illegal with buying out and closing your competition while keeping the R&D departments and such still working/grabbing all of the trade secrets and intel and so on and running with it.
Or, take it over, save a ton of jobs, and take the #1 spot in the U.S. and in many people's minds.
Right now, they have no reason NOT to just wait. The worse GM does, the easier it will be to take over the remains.
Bingo. As the value of the company erodes, it will be harder to find suitors who will pay much more than cents on the dollar for whatever is left.
I guess it is possile the Corvette and Caddy line are worth something, as well as Trucks and SUVs. Chrysler did by American Motors for the Jeep. Yeah, GM is worth some money. Actually, if zero debt after the bankruptcy, the parts could be worth some later on. The shareholders, like those which owned the original Kmart shares will be those hurting. Would they buy into Opel and Holden? Maybe those have worth.
As for styling saving GM, well nahhh, not this year, or next year. Can't hurt though to do what they can do spice up an image. As is, I would say one of major issues for GM is that they just look tired. Maybe that is one huge problem. While the ad says an American Revolution, people are thinking more Evolution. While Chrysler had some real sparks flying with the 300 and Magnum car, even the PT Cruiser, the GM line still looks tired. The advertising for the Cadillac line, and the cars and trucks offered a few sparks some time back, but since has become.... tired.
Shot of vitamin E required! Or is that vitamin B12?
-Loren
I think they might need steroids at this point.
one of major issues for GM is that they just look tired.
This IMO is a key point. Cars that are not exciting, imaginative, best in class for styling and engineering and value. How could you carry on expecting to gain or even keep customers like that? I doubt if a 2010 Camaro will do much either. The people who identify with a Camaro are past the point of wanting one and the new people in the market don't want to buy a relic from the past...that is a wild guess (same for the Challenger too). IMO they would be better off designing a new 4 seater that looks more with it than digging into the glory days of the past.
I have only one vote for which car would you buy based on looks alone, the new LaCrosse or new Citroen (I picked this one because it is creative and not too far out)
2006 Citroen
LaCrosse
Vote and we will tally the score. One vote for LaCrosse so far.
2017 MB E400 , 2015 MB GLK350, 2014 MB C250
That being said, you are essentially right -- GM and the other domestics need to use distinctive styling in order to reconnect with the marketplace, the current designs just aren't going to gain them market share. DCX's recent successes with the 300 and Caliber, Ford's success with the Mustang, and Nissan's US turnaround via the G35 and Altima are good examples of how offering cars that compete on styling and vibe are a good way for previously lackluster brands to mount a recovery.
Now the new 3/5-door Civic
Or the 2006 VW GTI
Even the BMW 1-series
And lastly, who could forget to include the Caterham Seven
:shades:
Ummmm, we are speaking with a
GM board member, sir? I'm impressed! :surprise:
Loren: Gas is down to $2.89 for a gallon of pretty much anybody's regular down here now. Temporary, I'm sure.
Hey, did they change the V-6 motor in the Mustang yet? Is that why the MPG dropped? Did they put the 4 speed tranny in and replace the 5? Something changed.... :confuse:
The new V6 is the German 4.0 used in their SUV and I think Ranger trucks. Pretty good torque, but really, the 25 MPG is not very good by current standards for gas mileage. The stick gets up to 28 MPG, which is better, but still below the previous model of Mustang. The V8, with an automatic is pretty close now in gas mileage to the V6.
The interior is along the theme of the 1965, while the exterior is a mix of '68/'69. Harder plastics now, with rectangular theme going within. Some may say this is an improvement over the previous model. Hummm?
Anyone, currently looking for New Stangs will find a lot of them on the lots now, so discounts should be generous.
The Camaros aren't selling well. Maybe it is the order dates of 2010?
Loren
Even the BMW 1-series
Or the 2006 VW GTI
the new 3/5-door Civic
and especially the Caterham Seven
Now those are innovative!!!!!!!!!
and I agree the Citroen is too French for American tastes, but it has potential and is unique, stands out, and has some thought put into the design...not just a carbon copy of everything that has been done before...much better the first time around when it was new!.
2017 MB E400 , 2015 MB GLK350, 2014 MB C250
That's great. You must be seeing used ones because the sales are down from 34,420 last year to 27,110 this year!
Buick LaCrosse 4,990 6,527 27,110(2006) 34,420 (2005)
Maybe, as they depreciate so fast people are buying up used ones plus a few new ones and it looks like the numbers are bigger.
2017 MB E400 , 2015 MB GLK350, 2014 MB C250
I think the LaCrosse is a nice design, and pleasing to the eye. Not edgy enough, as is really new though, to attract more buyers. Or maybe it is the image of owning a Buick. The car itself looks pretty good to me. Could be the reviews are not overly good when the car is compared to others, or perhaps it is price? Some may be just waiting for the $10K off sticker which comes soon for used car buyers. Perhaps it could have been a little more bold, but overall the design is one of GMs best for sedans. Don't think it was the designers that let Buick down here. And I suppose they are selling some. Hard to know since so many rental cars are in the local area here.
-Loren
BTW it was 50-50 older/younger drivers.
Just an after thought. Has there been enough time for any to come back from the rental companies? (if they even had them).
Did ya notice the big green E on the backs of them????
If that's correct, that's a really thoughtful insight. Turnaround guys are very good at efficient cost cutting, understanding how to revive the market, and in taking decisive action, but many are not necessarily good at going the distance. The skills needed are largely entrepreneurial, which are not necessarily the same types of skills needed to run the organization once the problems have been fixed. Perhaps Ghosn is the type of CEO who needs to bring in to clean up the damage, before handing the reins to someone else.
This one smells worse than rotten... :sick:
It's not a merger, it's an investment. Renault and Nissan aren't going to do a stock swap with GM, but invest capital.
Since we don't know what Renault and Nissan have in mind, it's hard to evaluate the deal from their perspectives. Whether or not their motivations are sound, I don't know.
As for Kerkorian, this is the best option he has. A private equity group would pay far less for far more equity, and would probably sell off large parts (i.e. foreign operations) to recover cash. In contrast, R-N would find some uses for GM's automaking capacity, pay a higher price and bring in a top-notch CEO who can cast out the deadwood. For Kerkorian, what's not to like?
Then there's the Northstar engines, which are easily as advanced as Toyota's designs. Toyota really doesn't have a V8 lineup. Putting a Northstar in a Lexus with a few minor tweaks... I can see it.
And of course, there's the pickup and commercial truck lines. Toyota is seriously lacking in these areas by comparison. Want to sell trucks? Buy GM for pennies on the dollar and enjoy.
Or you could have a slightly smaller company take them over. Honda, IMO, would be more likely to do this - they are in a position behind Toyota, have nearly no trucks, and well, they really don't have any inroads into fleet sales in the U.S.(Honda police car? Don't think there's even one in the U.S.), either. Do a D/C type merger/buyout. Problem solved.
My only personal experience is knowing an older gentleman with a Caddy which blew up on him going up Cuesta grade. Don't see any data in CR mag. which looks promising - actually lots of black dots. Most other sites it rates better. Looks like long term for some years was good in the JD Powers data. At MSN it states some occasional problems. Guess the question is, it this hype, just good-not too special, something special, or actually not the best engine overall. Still seem to hear of people swearing at them, and those swearing by them.
Saw a used '95 Eldo which looked really sharp for an asking price of $7.5K today. Always like the looks of the final rendition of the Eldorado. Ah but kinda a big toy to put in the driveway. :shades:
As for the magnetic ride suspension, it sounds impressive. I am sure it does something great and cost a fortune to repair. May be good to sell for the Lexus line. Same class of wizard stuff at an expense - come aged.
I'm not sure what Renault-Nissan wants out of a potential "alliance", but I suspect that R&D is way down on the list.
I'll guess that it's more about gaining some cost savings and efficiencies through platform sharing and tapping into GM's distribution network, including in markets outside of North America.
Do a D/C type merger/buyout. Problem solved.
GM's balance sheet is a bit ugly for that -- liabilities are far too high (and those are mostly in the form of debt, not pension obligations as the management would like us to believe.) Renault-Nissan have offered to invest capital, which I presume would be placed in some combination of stock purchases and loans to GM, not to swap stock as was the case with Daimler-Chrysler.
You know that would be one heck of a boost for GM sales. Say the Aura, and Solstice, or G6, and Lucerne with i4 and v6 power by Honda. That may be a big sales booster. GM could be the coach works, or Body by Fisher.
I think I am getting tired, so sleep may help me think this over more clearly by tomorrow -- I said what :surprise:
How about Hyundai company as a buyer into GM. They need market share, and inroads into all the markets GM is in. Quick way to expand. Or maybe not.... good night from the left coast!
-Loren
:P LOL! I think none of us on THESE boards are on THAT board! Would be intersting if we were! I'd vote for:
Socala
Rocky
Lemko (as a counterbalance)
Imadazole (don't remember the spelling)
62vettefp
...and let's not forget m1miata!