Rick Wagoner is still in charge.
It's too early to predict the final outcome of Kirk Kerkorian's proposal to form an alliance between Renault, Nissan and General Motors.
But it looks like Wagoner, GM's soft-spoken CEO, has won the first round of his high-stakes poker game with the Las Vegas billionaire. Here's why: During a 90-minute teleconference on Friday, July 7, GM's board agreed to let company management - i.e., Wagoner - study Kerkorian's proposal.
If Kerkorian gets his way, a full-scale alliance presumably would leave Nissan-Renault chief Carlos Ghosn in charge of all three companies. Does anyone doubt how Wagoner would respond to that?
Kerkorian wants GM's board - not management - to study the proposal. That would allow Kerkorian adviser and GM board member Jerry York to influence the outcome, and it would minimize Wagoner's influence. But Kerkorian did not get his way.
The bottom line: GM's board still supports Wagoner. The board's decision will strengthen Wagoner's position when he meets Ghosn on Friday, July 14 to discuss the proposed alliance.
Granted, all parties are making a public display of good manners as they try to out-maneuver each other. For the record, Ghosn insists that he wants an alliance only if GM's board and management support it.
Meanwhile, Wagoner is avoiding any overt criticism of Kerkorian's proposal. He is acutely aware that Wall Street is intrigued by the proposal.
GM's stock jumped 9 percent on June 30 after Kerkorian disclosed his proposal to the Securities and Exchange Commission. Investors want GM's turnaround to accelerate. If Wagoner simply rebuffs Kerkorian, GM's stock price likely would plunge.
For the moment, Kerkorian is biding his time. On Friday, Kerkorian's investment company, Tracinda Corp., issued a polite statement that thanked GM for agreeing to explore a possible partnership.
The statement called the upcoming meeting between Wagoner and Ghosn "a good first step," but added that "full and objective evaluation of this unique opportunity will require establishment of a board committee that receives independent financial and legal advice."
Translation: Don't let Rick Wagoner rig the study.
If GM's turnaround stumbles this summer, investors will pressure the company's board to accept Kerkorian's proposal. And that will give York an opportunity to gain the board's support.
Rick Wagoner has won the first round, but the game is far from over.
You may e-mail David Sedgwick at [email protected]