Boardroom Leaks Irk GM Chief
General Motors Corp. Chief Executive Rick Wagoner voiced concern Monday over recent leaks of sensitive board information, hinting that investor Kirk Kerkorian’s representative, Jerome York, was behind them.
Meeting with editors and reporters at the Los Angeles Times, Wagoner was noncommittal about the progress of talks initiated by York last month to explore linking the automaker to an existing alliance of France’s Renault and Japan’s Nissan Motor Co.
But as negotiations leading to those talks continued, Wagoner said, “I have not been pleased at the number of leaks out of the board” about York’s activities and board business discussions.
Although Wagoner did not name York specifically, his comments left little room for guesswork. They came in answer to a question about the state of his relationship with the longtime advisor to disgruntled shareholder Kerkorian, the Los Angeles billionaire whose 9.9% stake makes him GM’s fourth-largest shareholder.
York and Kerkorian declined through a spokesman to comment on Wagoner’s remarks.
York, who was elected to GM’s board in February at Kerkorian’s urging, has personally pursued the alliance plan with Carlos Ghosn, chief executive of Renault and Nissan.
Wagoner, who met with Ghosn on July 14 to discuss the proposal, said a small group of GM representatives was working with Nissan and Renault representatives to study the possible benefits of some sort of alliance.
But “it is just getting going in earnest,” he said, adding that all sides have agreed that it will take at least 90 days to fully consider the possibilities and come up with some recommendations.
Wagoner also reiterated earlier criticism of York for pursuing the proposed deal outside of normal board channels, saying it wasn’t done “the way I’d do it.”
Wagoner also said York’s initiative was ill-timed, with GM attempting to rescue its sagging U.S. automotive operation and Renault trying to cope with a sales slump in France.
“Later would have been better,” he said.
The alliance has been proposed as one means of helping GM find the leadership, planning, engineering and even financial assistance to help reverse decades of sales declines in the U.S. Wagoner said GM was on a course to recovery and didn’t need the outside help.
He said GM still must complete the sale of a 51% interest in its profit-making finance arm, General Motors Acceptance Corp., and help resolve labor talks at supplier Delphi Corp., which filed for bankruptcy protection in October, to avoid a threatened strike that could cut off the flow of crucial parts and components to GM. That could force a shutdown of the automaker’s domestic plants.
Delphi has asked a U.S. Bankruptcy Court judge to allow it to void its labor contracts and slash wages by almost 62% to an average of $12.50 an hour from $27.50.
Hearings on the request are scheduled to resume Friday in New York after a 60-day hiatus in which GM, Delphi and Delphi’s unions were to try to work out a settlement.
Wagoner said he remained optimistic that GM could help broker a settlement, although he would not say whether a resolution would come before the end of the week. The settlement could include GM subsidizing some Delphi workers’ wages.
He also said the GMAC sale was progressing, albeit more slowly than he’d like. It now appears that obtaining the necessary regulatory approval will take longer than anticipated and drag into next year, according to a Securities and Exchange Commission filing by GM.
During the 90-minute meeting, Wagoner also predicted that GM’s new full-size pickups would post strong sales next year on the strength of their new design, even if fuel prices remain high.
He said although GM intended to remain strong in trucks, it had a number of new or redesigned passenger cars coming in the next two years that should help it regain some of the business it had lost to Toyota Motor Corp. and other rivals.
In addition, Wagoner said, GM’s decision to move away from costly sales incentives in favor of more realistically pricing cars and trucks has resulted in “a $1,000 reduction in incentives per vehicle and a $1,000 increase” in the average sales price of each vehicle as buyers add options that boost lower sticker prices.
