GM's Talks With Ghosn May Be for Kerkorian's Benefit

The bottom line is that the discussion, despite public statements to the contrary, did not go well. There was no shouting or shooting, but there was profound disagreement -- especially over the matter of who would benefit from a consolidation of supplier purchasing costs in the event of a GM-Nissan-Renault alliance.

"From our perspective, GM is the side that would generate most of those savings; and it's only fair for GM and its stockholders that GM gets the most benefits from those savings," said a GM source intimately familiar with the talks.

Nissan-Renault saw things differently, that source said.

"We believe the negotiations are going well," said a Nissan-Renault source familiar with the talks. "But things have to be fair. One side can't demand everything."

Upping the Ante

Sensing that the alliance talks were heading south, the Tracinda people decided to up the ante. On Thursday, they announced plans to purchase 12 million additional GM shares, raising their stake in the company from the current 9.9 percent to 12 percent, and to petition the GM board to put more pressure on Rick and the gang to talk more amicably with Carlos and his boys.

But professional gamblers are a shifty lot. What you see them doing, what you think they are doing, often isn't what they actually are doing.

Consider: You put up larger stakes at the table. That gets the players on Wall Street excited. You know your ploy isn't going to lead to any alliance. But the suckers who followed you think it will, thus raising the value of your bet if you play your hand right. Before the talks fall apart, you switch your bet in favor of failed negotiations, and cash out much richer than you were a week or so ago.

But sources intimately familiar with the negotiations -- even those GM executives who fear that corporate pillage is what the Tracinda initiatives are all about -- are reluctant to say so privately or publicly, though they acknowledge that it's a real possibility.

In the end, a GM executive said, "We aren't going to do anything that hurts GM or that endangers our turnaround. We've done lots of work on these alliance talks. We've been diligent. We've taken them seriously."

"We're going to present a thorough report to the board," that GM executive said. "If there is something additive for GM and its stockholders, we'll consider it. If not, we won't."

Stay tuned.