Things that happened while I was asleep:
Jerry York, the representative of snappy octagenarian investor Kirk Kerkorian, resigned from the GM board:
General Motors investor Kirk Kerkorian’s representative, Jerry York, resigned from GM’s board of directors today.
Kerkorian also says he will not pursue purchasing as many as an additional 12 million shares of the stock, according to a filing with the U.S. Securities and Exchange Commission from Kerkorian’s Tracinda Corp.
This year, Kerkorian pushed for GM to consider an alliance with Nissan-Renault. GM agreed to conduct a 90-day study of a potential alliance. But on Wednesday, Oct. 4, GM said that its board had voted to terminate the study just 10 days shy of its 90-day expiration date.
In its filing, Tracinda cites GM’s move to “abruptly” end the study before the original deadline without getting an independent third party to evaluate the possible alliance. Kerkorian earlier had asked for an independent study.
The filing says Kerkorian will review his investment in GM….
In response, GM hopes that neither York nor Kirkorian get hit by a bus accidentally:
Under the direction of the GM Board, we remain focused on our North America turnaround, where we are making real progress, progress that is well ahead of what some skeptics thought possible…..
…..With respect to the comments on the Renault-Nissan alliance study in Tracinda’s 13D filing, it’s appropriate to note that the decision to end the equity alliance discussions was unanimously approved by the GM Board, which consists of 12 directors, 11 of whom are independent of management. This decision was made after a comprehensive process that included joint synergy evaluation by the management of all three companies and receipt of advice on the proposal by two prominent financial advisers.
This may or may not be the last we hear of this issue.
As an aside, I’ve been watching Robert Farago’s GM Deathwatch series for some time. I had a point/counterpoint argument with him over Saab some time ago and one of the things that I said in that argument was “what happens if GM turn around and your whole argument falls on it’s head?” (words to that effect, anyway).
Given that GM are showing signs of life it’s been interesting to see his spin on these latest events. This excerpt was published a few days ago, just as the talks wound up and prior to York’s resignation:
Meanwhile, reports are filtering in that GM CEO Rabid Rick Wagoner has finally called off the Nissan – Renault alliance talks. This may have a little something to do with new rules enacted yesterday by GM’s Board of Bystanders. The language is a bit convoluted, but the rules make it easier for the Board to remove pro-Renault investor Kirk Kerkorian’s man Jerry York, and prevent Captain Kirk from adding new members. So Rabid Rick’s covered his ass and told Kirk to take a flying leap. As we predicted, things are getting ugly over at RenCen.
The battle for control of GM is just beginning. Kirk is sure to retaliate against GM’s CEO, and The Lion of Las Vegas is nothing if not resourceful.
First up, the language in the re-written board rules make it harder for one member to force an issue the way “Yorkirkorian” did. Second, The vote to end the alliance talks was UNANIMOUS, meaning York voted for it as well. Thirdly, York wasn’t removed from the board, he resigned. If KK wanted him to stay, I’m sure he would have.
Months ago, when I asked if Farago would look silly if GM turned it around, a commenter who was very supportive of Farago’s stance, Bill Bartman, said that if GM did manage to turn things around then everyone would forget about Farago’s column in the blink of an eye – and if GM do go under then Farago would look like a genius.
Rob, I’m not wishing you any harm, but I’m not forgetting either.