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Kirk Kerkorian, Generous Motors and Making Money

Read more articles on The Thoughts Of A Writer In New York City.

July 6, 2006

About This Editor: I am a writer. Have been writing for other sites, but expect to do most of my future work HERE! My expertise extends from the esoteric such as burning hydrogen to the unpredictability of the stock market and my writing makes me a jack of all trades and exasperated master of none. I have had some influence over national wildfire and water policy and there are hints of a change in energy policy, BUT as Samuel Goldwyn once said, "A verbal promise is not worth the paper it is written on."

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Last year, I tried to unsuccessfully sell an article that combined pieces about Kirk Kerkorian’s purchase of GM shares, the history of the company and its future.

As an investor, Mr. Kerkorian wants the company to be more profitable. As part of that strategy, management has sought to cut costs by gaining labor concessions, especially reducing man count and also farming out some work to cheaper reaches of the globe.

Mr. Kerkorian has just made the papers again because he wants Renault and Nissan to invest in GM, with an international alliance im mind. A brief summary of how the company first became successful should be very interesting.

In the beginning Ford was the biggest auto maker because the boss, Henry F., was good at automating production and reducing costs. One result was you could buy one of his cars in any color so long at it was black.

GM was solidified in the 1920s by combing several established brands and merging with the biggest horse drawn buggy maker of its day to instantaneously increase the company’s car distribution network.

With that in mind, it is easy to see how combining three big brands on three different continents might follow the same scenario with the caveat that costs can simultaneously be reasonably controlled.

Think about it.