GM Buyout?

As regular readers of this blog know, General Motors is a troubled company. It is losing lots of money per car. Its market share is declining. And, at the behest of Kirk Kerkorian, it is investigating an alliance with Renault SA and Nissan Motor Co., which currently own about 20% of the company.

Obviously, this isn't unprecedented. Former Big Three American Automobile maker Chrysler is now Daimler-Chrysler. It has been bought out by the Japanese. Now, it looks like the French and Japanese could take General Motors. This would leave Ford as the only major American automobile maker.

Of course, what makes an automaker American? Many "foreign" automakers, and all "domestic" automakers, have both American plants and foreign plants. All major automakers are publicly held and have some percentage of owners that are in a wide variety of countries. Anyone who buys shares on the stock market can be an owner. It isn't even possible to precisely determine who owns the a company, as much of it is typically held indirectly through institutional investors like insurance companies, pension funds and mutual funds. All American automakers and most foreign automakers sell cars in more than one country. Also, almost every automaker in the world, Ford and General Motors included, has deep special alliances with other automakers.

I hope the deal goes through. The recent acquisition of Jaguar by Ford has brought good new products into the market, and it would be nice to see that Renault return to the American market. Also, anything that salvages GM could save the taxpayers a lot of money that might otherwise have been lost, by salvaging its pension.