GM's salvation is at hand.
Now that billionaire investor and gambling mogul Kirk Kerkorian wants to own nearly 9 percent of General Motors, everyone can breathe a sigh of relief. After all, Kerkorian is a well-known corporate white knight and Mr. Fix-It with a proven track record of helping ailing automakers get back on their feet.
Like Chrysler Corp.
There's no reason to think that at least 5 percent of GM's shareholders won't jump at the chance to sell their shares to the 87-year-old Kerkorian, whose Tracinda Corp. offered to buy as many as 28 million shares of GM stock at a 13 percent premium over Tuesday's closing price.
Officially, this is just an investment. You know, it's a chance later for a little good, old-fashioned buy-low/sell-high profit taking. That must mean Kerkorian thinks GM's profitability and North America cost issues can be resolved.
That would be good news. And if Warren Buffett and his Berkshire Hathaway investment company jump in, it might be time for dealers, employees, suppliers and shareholders to turn cartwheels, pump their fists in the air and do high-fives.
But wasn't that Kerkorian's original rationale for buying Chrysler stock? It was supposed to be just an investment back before his 1995 takeover attempt. Ten years ago, retired Chrysler CEO Lee Iacocca and former Chrysler Vice President Jerry York agreed to help Kerkorian because they thought Chrysler needed new leadership. Well, actually, they thought Chrysler needed the old leadership back.
Is that what Kerkorian's stock buy is all about, a perceived need for new leadership at GM?
But there is another, darker view. As Merrill Lynch analyst John Casesa quickly noted, Kerkorian's investment specialty is unlocking shareholder value. That can mean grabbing enough control of a company to force the divestiture of valuable operations and subsidiaries. A supposed noncore asset like General Motors Acceptance Corp. probably looks like a treasure trove on Wall Street or in Las Vegas.
Breaking off GMAC might make investors ecstatic, but it could cripple the holistic enterprise.
Casesa expects a long, drawn-out fight, which could be a major distraction for CEO Rick Wagoner, just as he has assumed more responsibility for overseeing North American operations.
Kerkorian doesn't always win. Chrysler CEO Bob Eaton figured out how to handle Kerkorian in 1995.
Come to think of it, Wagoner might want to give Eaton a call.
You may e-mail Edward Lapham at