GM reportedly bracing for Kerkorian fight
Paper: Automaker hires two investment banks; execs fear retaliation from largest individual shareholder as company says it will revive matching 401(k) plans.
NEW YORK (CNNMoney.com) -- General Motors has retained two investment banks as the automaker attempts to protect itself from a potential proxy fight from its largest individual shareholder, Kirk Kerkorian, according to a report published Wednesday.
Citing people familiar with the situation, The Detroit News reported that the automaker hired Goldman Sachs (Charts) and Morgan Stanley (Charts) and began devising other safeguards against Kerkorian while GM discussed a possible alliance with Renault-Nissan.
GM rejected the idea of a partnership earlier this month, prompting criticism from Kerkorian and his advisor Jerry York, who stepped down as a board member after the alliance talks fizzled.
Could a Nissan-Ford deal be next?
GM chief Rick Wagoner and other company execs believe that Kerkorian may attempt to retaliate as a result, people close to the company told the News.
"I don't know if (GM) is expecting an attack, but I would say they are preparing for one," Peter Henning, a Wayne State University law professor and former enforcement officer at the Securities and Exchange Commission, told the paper.
But even while GM was in talks with Renault-Nissan, the U.S. automaker was already enacting safeguards against Kerkorian, including changing company bylaws, according to an SEC filing.
The bylaw changes would make it more difficult for Kerkorian, who owns nearly a 10 percent stake in the company, to elect new directors or put strategic issues to a direct vote of GM shareholders.
GM also froze the size of its board at its current 12 members, further complicating Kerkorian's position, the paper reported.
"That appears to have been done to keep Kerkorian from adding additional directors" by proxy, Henning told the paper.
In related news, The Detroit Free Press reported that GM will bring back matching contributions to its 401(k) retirement savings accounts next year.
A company spokesperson told the paper that it will offer its salaried workers 50 cents for every dollar contributed, up to 4% of their salary.
The 401(k) plan was suspended earlier this year as a cost-cutting measure.
GM (Charts), like crosstown rival Ford (Charts), has been in the midst of a company turnaround, while the two automakers continue to lose U.S. market share to such competitors as Toyota (Charts).
Facebook
Twitter