By accessing this website, you acknowledge that Edmunds and its third party business partners may use cookies, pixels, and similar technologies to collect information about you and your interactions with the website as described in our
Privacy Statement, and you agree that your use of the website is subject to our
Visitor Agreement.
Comments
Rocky
How could they do this to me ?
Rocky
More importantly than cash, the deal would bring with it the best turnaround guy in the automotive business. More than cash, what GM needs is decisive leadership with a product focus and an understanding of consumer markets, something that it is sorely lacking. If the only thing that GM got out of this was Ghosn as its CEO, it would already be a winner.
On the other side of the coin, R/N does not get much of what it really needs. GM gives it trucks in North America and some boost in China. GM does not give it a luxury presence in Europe. GM on the other hand gives R/N massive redundancy in mid and large sedans in North America and compact and sub-compact sedans in Europe and the developing world.
On this I agree. This brings me back to my speculation that this is ultimately about platform sharing, something that I doubt would benefit anyone.
One left-field speculation of mine is perhaps that Renault would want to take advantage of the relatively low US dollar, and commandeer some underutilized GM capacity in the US and Canada to build Renaults that would be sold in Europe and elsewhere. (It might be seen as cheaper and faster as building entirely new plants.) But I do have my doubts about this on a lot of levels, including whether European buyers would be inclined to accept Renaults built in a country not renowned within Europe for building decent cars.
To be honest, I'm not sure GM is salvageable by anyone at this point. I don't think Ghosn or York or Kervokian should even try!
GM better build me my 2008' Buick Velite Roadster, if they want me to keep swallowing the Kool-Aid :sick:
Rocky
Rocky
At one time, rumors had it Lutz was cheerleading for Ghosn. Seems to me if Kerkorian has enough influence with Renault to make a one sided merger, he has enough to prise Ghosn from Renault. Maybe GM could swap license rights to the dual phase hybrid? (Daimler and BMW may have some say in that, however.)
But I do have my doubts about this on a lot of levels, including whether European buyers would be inclined to accept Renaults built in a country not renowned within Europe for building decent cars.
Making EU cars in NA makes sense economically. Renault is wired into that whole EU employment regulatory framework. I am not certain they could can EU labor in favor of less expensive NA labor, even if it does make sense from a dollar perspective.
I like the Wildcat. However, you may recall that I said the price tag for these types of Buicks were going to be around $60,000. This is really Lexus territory. Perhaps Buick is moving above Cadillac.
For the dealer, this shouldn't matter. The dealer's net purchase price of the car (invoice, less holdback, additional discounts and incentives) is not impacted by the loan used by the consumer used to buy the car. The manufacuturer eats the full cost of the 0% subsidy.
To understand this, it's important to understand how dealerships make money. There are four main profit centers: new car sales, used car sales, service and F&I, and F&I profits are significant for most dealerships.
The dealership's F&I department effectively serves as a loan broker, gaining access to loans at a wholesale price that it resells at high profit margins, often by setting a higher interest rate than the same consumer could get from a bank. The dealership gets paid a fee by the manufacturer for placing the 0% loan, which is pretty good for the dealer. But what would be even better for the dealer would be for it to place a loan on the car that it sells at a high markup compared to the wholesale rate that it gets from the banks that it does business with.
In respect to our poster who bought the G6, I would tend to assume the worst about the dealership. In its supposed scramble to find a new loan for the car, the dealership is probably going to try to stick him with a high-rate loan with more payments, trying to get him to focus on the monthly payment while getting him to ignore the interest rate or the term. (They can reduce the amount of a monthly payment while jacking up the interest rate simply by extending the term, which of course leads to a lot more months worth of payments and a higher total cost.)
The dealer's game plan is to use the incentive to get the car off the lot and to set up the buyer for a marked-up loan later. It is likely that the dealership knew that the buyer didn't qualify for the loan, but submitted the application anyway in order to bait the trap. Now the dealer may very well take a loan that he bought at 5% and resell it to our buyer for 12%, keeping the 7% difference as profit in its own pocket.
That's why I encourage our poster to get a different loan to payoff the purchase, if he doesn't want to get his trade-in back, because the terms will likely be far better than what the dealership would offer. If anything, I might even be inclined to renegotiate the purchase price of the new car, if the alternative allows the contract to be cancelled without penalty.
Rocky
P.S. Look for Cadillac to go up market to Mercedes levels.
York and Kerkorian have no choice. They already have billions invested. They seem to be taking the wrong approach, however.
Seems to me, by the time you count all the dollars a misguided merger will suck up, there would be more than enough to eliminate Buick/Pontiac/GMC, upgrade the Saturn and Chevy franchises, and maybe even something to increase diesel production.
Renault essentially can't fire anyone, European labor laws are far more restrictive. In working with the French unions (which make the UAW look like pussycats), Ghosn made it clear that he would not be pushing for job cuts within Renault. His goal is to hurdle the losses by increasing sales volumes, not by reducing the size of the workforce.
To what extent the unions would need to consent to Renault US imports, I don't know. I'd bet that they do need to consent, and they wouldn't dream of allowing it if they can avoid it.
Rocky
This is the main risk for Renault and Nissan, and summarizes why M&A deals generally erode shareholder value. In this case, not only is there likely not enough time in the day to manage three companies in various degrees of trouble, but trying to combine certain functions in the name of efficiency may end up costing more in time, money and brain damage than it saves.
Depending upon the studies that you read, anywhere from 50% to 70% of M&A deals don't work for the acquiring company. I've never once seen a study that claimed a failure rate of less than 50%. In that sense, you have better odds of having a flipped coin go your way than you would making one of these deals work. Again, potentially a great thing for GM, not so good for Renault or Nissan.
Myself that's to difficult to answer.
Rocky
Rocky
-----------
Whaddya expect from GM? Competent managerial decisions?
:P
Lexus is nothing more than the Asian Buick.
:shades:
Neither Edmunds, nor GMInsiders, have anything to say about what GM may want to do with the Velite.
What would the breakup value be if the sub-brands were sold? For example, if ford sold jaguar, volvo, land rover, etc.
I think ford has more value than GM in this respect. Hummer won't sell for much nowadays, and neither will saab. The other badges have too much of the rebadging aspect to be broken off easily.
Yeh, it might be supersmart of those two. A way to turn a quick profit and get out. Ghosn must let all this talk of superman get to his head. The industry consensus here and in Europe is it's a lousy idea, so maybe GM can fight it off w/o too much trouble.
They're comparing it to two colossal mistakes: DC merger, and BMW's takeover of Rover. Except this will be the most colossal.
I know, I know, I should be promoted to chief engineer of this vehicle.
Rocky :shades:
GM & Renault/Nissan to talk
Hmmm, as most of us figured:
SUV/Truck Sales Down
GM has no choice. Kerkorian has created so much press buzz for this that there is no way for the Board to avoid the subject.
And for all we know, they may largely welcome it. Rick Wagoner certainly won't, but the others may be relieved by the prospect.
Hmmm, as most of us figured: SUV/Truck Sales Down
Say it ain't so. Are you trying to say that selling gas guzzlers while fuel prices increase hasn't been such a winning strategy ?!?!?!
Some would say yes, and that's why they would choose a Lexus.
Some would say there's nothing that has the feel of the road, the spirit of driving, and the engineering that is only found in a Mercedes.
IMO a Lexus is a fine vehicle and might be even more advanced technologically speaking in some areas, but it has a feeling of being manufactured as opposed to being made by craftsman. It is like trying to make a copy (and they do a great job of copying) the real original.
gogo has it right!
Naaah!
Lexus is nothing more than the Asian Buick.
2017 MB E400 , 2015 MB GLK350, 2014 MB C250
Saturn (Import entry Japanese fighter)
Pontiac ( BMW 3 series Fighter brand)
GMC (Upscale trim on Trucks/SUVs)
Buick (Lexus fighter)
Cadillac (Mercedes Benz on up fighter)
Nissan (Toyota/Honda/Euro fighter)
Infinti (Acura, BMW 5 and 7 series, fighter)
Saab (Volvo, Audi, VW, fighter)
Renault, I dunno ? :surprise:
Rocky
Rocky
I think it is good that SOMEBODY over there wants to move and shake things up. This may be good, may be bad, but at least it's not the usual "wait till next year, decade, century, eon (take your pick)" we usually get. It gives hope that something good and positive may happen, particularly with Golden Ghosn in the picture. Another good thing is that Ghosn, while being known as a cost cutter, knows where / who to cut, from the lowest stand-around employee to the highest manager, inside and outside supplier.
Say it ain't so. Are you trying to say that selling gas guzzlers while fuel prices increase hasn't been such a winning strategy ?!?!?!
Gasp!! :surprise:
I can't believe it either. GM management made a wrong move, decision. Is it possible?!?! Naw, gotta be the UAW's fault somehow.
I think you gave them too much credit by thinking they actually had a strategy :P
In telecom/internet equipment suppliers, heard that Cisco had a lot of success on "A" in the past in integrating the personnel/processes/products of their acquisitions. There were many writeups on how well a job that Cisco did. On the other hand, one fiasco I recall in telecom was supplier Lucent who bought a company in 99 for about 25B, had limited success in using/integrating that company's assests and then sold it off for about a half B a few years later.
Say Hallelujah! I just hope that he's not biting off more than he can chew. Handling these monolithic companies is cumbersome and complex, and Ghosn may encounter some severe culture clash in the process. It won't be easy to right this ship very quickly.
As I think about it, I think I know what Ghosn may be thinking -- he might be planning to cobble together some existing R&D and parts from Nissan, Renault, Opel/Vauxhall and possibly Holden to build strong competitive models in such segments as the compact, mid-size and near-luxury categories that can be introduced to North America very quickly.
In terms of segments, those are largely what he targeted for Nissan and with great success, and those companies know enough about building small cars to create immediate value for GM. The key here is speed and quality of execution, and if Ghosn can get replacements on the road for some of these GM laggards within 24 months, for example, then they may have a fighting chance.
It might also change the tenor of some of the supplier relationships, which would create some quality gains with minimal effort. While I know that some would prefer to blame the union with a broken-record tenacity, the fact is that most of the quality of a product comes from design, engineering and parts quality, all of which have been often second rate for the General.
This seems a little different than that though - wasn't the BMW deal an outright acquisition?
I think it STINKS of Daimler/Chrysler though. When all is said and done, GM will be run from Europe, if it goes through.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
A lot of it comes down to individual skills, and most CEO's don't seem to have the talent for it. The ability to combine operations for efficiency and cost savings ("synergy") is often overhyped and miscalculated, and is burdened with a lot of associated costs and culture clash that aren't appropriately budgeted for.
The thing is that so much M&A is driven by hype and eager investment bankers that it happens anyway, despite the high failure rate. It's a bit like a general conquering another nation and bringing it into his empire, except the combatants swap stock instead of cannonballs, so it remains sexy for leaders in search of feathers for their caps.
Bottom line is that leadership is critical to the success or failure of an acquisition, perhaps as much or more so than the companies themselves. Most CEO's are pretty mediocre and can't cut it, and the visionaries needed to pull it off are few and far between.
Rocky
York and Kerkorian have every reason to go the distance to make this merger a success.
They obviously want to make money, but the stock price won't move too far unless there are signs of a real turnaround.
There would be interesting speculation on what would be new name of Nissan, Renault, General Motors combo. How about Nissan-Renault Motors? Or, Renault-Nissan Motors?
Rocky
Rocky
OH YEAH !!! :shades:
Rocky
P.S. Whoops :shades:
Rocky
General Motors, needs a new breath of fresh air pal (Socala)
I'd love to see them merge as one. Kinda Bell South and AT&T.
Rocky
Carlos will be a excellent CEO.
Rocky
Yes & No. Depends what you are looking for, or looking at, when comparing a Lexus to a Mercedes. Cost as no object, I would probably still prefer a Mercedes for cruising along the Autobaun. For relentless pursuit of perfection, as in luxury, without many visits to the service department, that would be Lexus. Both would be excellent to own. To me, style like the SLK model is not going to found in a Lexus. For safety, one may have a image of a Mercedes as the ulitmate in safety. Not sure it is however any safer than equal cars in the Lexus line. The older ones seemed to built like tanks, but this is another era, so we must compare todays cars, and not the days of yore.
If I had the money, I would buy the BMW or Mercedes before a Lexus. Now, if it gave me fits, it would become a trade-in on a Lexus, or even say Cadillac. From the earliest years, growing up in sunny California, you long for a day when you can own an icon car, like a Porsche, BMW, Mercedes, muscle cars, Jaguar, Corvette, and while I am sure I missed a lot of other cars, Japan makes would not be on the list, other than the Z or Supra cars (at one time) and to a degree Cadillac. I am over fifty now, while I have owned and appreciate Japan quality, still drool more over other top line cars more. A Cadillac CTS seems to have more appeal to me than say a Lexus which looks more like a Camry. The CTS like the Mercedes SLK simply has style lacking in most of the Japan top line cars.
Would I pay as much for a Cadillac as a Mercedes or Lexuz? No. Since I grew up in an era of Cadillacs being sort of higher tech versions of Buicks and Oldsmobiles, I still see them in around that price point. And the Buicks seem overpriced. This in turn means discounting again. Now here we go again, no firm pricing. Buicks should be just under Camry prices, and the Cadillac should start around the Camry levels for better V6 models. No reason a base CTS with that 2.8 should be over $28K, and the 3.6 should be just under $30k (with good seats-telescopic steering). Lexus seem overpriced too, IMHO.
-Loren
Rocky