Relax. The news that GM stockholder Kirk Kerkorian has been playing footsie with Renault/Nissan doesn’t represent some kind of paradigm shift for GM or global capitalism. When assessing Kirk’s secret plan— selling a minority share in GM to the Franco-Japanese automotive alliance— remember whose interests The Quiet Lion serves: his own. This is not about GM. It’s about Captain Kirk’s spectacularly bad investment in the world’s largest automaker. But don’t take my word for it. "Sometimes the news in itself is already the purpose," DaimlerChrysler's CEO announced upon hearing the news. In other words, multinational automotive conglomerator Dieter Zetsche thinks Kerkorian is just talking up GM’s stock price.
Lest we forget, the octogenarian investor has lost about a billion dollars since he started buying up GM stock. (I don’t care how many billions you’ve got stashed in Swiss bank accounts and offshore trusts, one less thousand million has GOT to hurt.) Anyway, mission accomplished. Despite the fact that GM-friendly Wall Street analysts have just celebrated GM getting smaller, the investment community is, let’s face it, a size queen. The news that Captain Kirk has been busy whoring GM to dubious foreigner carmakers— I mean discussing the possibility of GM entering into a mutually beneficial strategic alliance– sent GM’s stock price soaring. On Friday (always a good day to hit the market with a surprise), GM shares closed at $29.79 up $2.35.
On the other hand, if Wall Street catches wind that Kerkorian is unloading a chunk of his 9.9% GM shareholding, the company’s stock price will swan dive. So it’s not entirely impossible that Kirk’s play is what it seems: an attempt to save GM’s bacon. And yet, on the face of it, a GM – Renault/Nissan hook-up makes no sense. Even The Detroit News’ resident optimist sees no benefits to the deal. “GM has spent the past 15 years pushing to achieve what the megadeal would purport to achieve," Daniel Howes wrote yesterday. "Economies of scale in purchasing, common manufacturing and product development processes, global leadership in developing world markets. These megadeals seldom — if ever — deliver the ‘synergies’ their highly paid outside architects say they will.”
Of course, there is one important benefit to Captain Kirk’s bold moves: cash. If you take a close look at what’s been proposed, Kirk wants Nissan/Renault to partner up, then “seal the alliance” by buying 20% of GM’s common stock for $3b. Three billion dollars doesn’t seem like a lot of money in the GM scheme of things. It’s almost a billion less than GM CEO Rabid Rick Wagoner recently spent paying 37k union workers not to work. But it’s not chump change either— especially when you consider the fact that GM is running on fumes. Remember the extension of GM’s accounts payable and the new secured line of credit? Cerberus does.
The [fire] sale of The General’s GMAC finance unit to Cerberus Capital Management is the last bit of family silver The General has left to flog. And it’s only two credit downgrades away from implosion. Without GMAC cash, the show’s over. In fact, it may already be too late. GM’s vehicle sales are in the doldrums, there’s no Hail Mary in the pipeline, market share (dealer income) has gone south and a bunch of humongous downsizing bills are coming due. Not to mention the possibility of an August strike at GM’s mission critical ex-subsidiary, bankrupt parts supplier Delphi (yes that). Avoiding Delphi's cyanide pill may require another billion or so from GM’s threadbare corporate pockets.
If you doubt that GM could be so cash-starved that The Quiet Lion would be allowed to sell the company’s soul to Renault/Nissan, consider this. TTAC commentator Finance Guy recently alerted us that GM is offering its zero percent new car financing deal to anyone with a pulse. More specifically, FG has resurrected 10 dead deals. No wonder: GMAC will now buy down on credit tiers A to E (prime to non-prime buyers). Cutoff is around a 590 FICO. Typically people in that range can’t get a new car without a substantial down payment. Obviously, GM is opening the floodgates. There’s one word for that: Mitsubishi. The Japanese carmaker’s US fortunes foundered on the rocks of easy credit, as hundreds of thousands of come-on-down loans blew up in their face.
In short, the idea that GM would contemplate joining a Renault/Nissan “alliance” is a sign of the General’s desperation, not its ability to seize an international opportunity (whither Fuji, Fiat and Suzuki). Viewed from another angle, depending on what the Franco-Japanese contingent want for their money, you might even say that GM’s breakup has already begun. In any case, it’s yet another one of the bizarre episodes we’ve been predicting for some time: the end of days at GM.
This deal does not make any sense. Considering what a loose cannon Captain Kirk and what an arrogant moron Rick is this deal will be forgotten by next week.
What happens when GM does go under? Do the brands simply disappear or will other, successful companies buy them up?
When GM files, it receives bankruptcy protection from the unions, dealers and creditors. It then gets to reinvent itself. Chances are it’ll simply ditch the bad brands (shut them down) and try to revive its core: Chevy, Caddy and (possibly) GMC. Perhaps I’ll make a few calls and make that he subject of another rant. Of course, that would be a GM Ghost Watch…
If GM has to reinvent itself from the inside out, Toyota will come in and ull something, then grab number one spot.
Every time I see the name “Kirk Kerkorian” it brings to mind the name “Jack Kevorkian”.
Not to change the subject but the GMAC purchase policy has gotten more insane as the week progressed.590 is not a cutoff at this point,we have put people in the low 500s in new cars.they approved one currently past due on his trade in ,and $8000 to $9000.00 over MSRP advances are not uncommon at least at my store.I dont know how we will ever get these people out of these cars next time
Robert-
Explain to me again how the government will let GM go out of business when it saved the airlines, amtrak, and even Chrysler back in the 70’s. There’s too much to lose here, come on Robert you can’t really believe the government will let GM go under. Imagine the political ramifications for W and the Republican party if they allowed GM to fold under their watch. The Dems would be able to put Mickey Mouse in the White House after that or even worse HILLARY!
I think there is another possible explanation for Kerkorian proposing this deal: Charles Ghosn. The golden boy of car company turnarounds, Ghosn has credibility that would a). raise the stock price, and b). help bring attitudes on the Board back to reality. Ghosn almost certainly would never agree to the deal if Wagoner was around, and Kirk would most definitely like to see him gone, so it is beneficial to Kerkorian’s machinations.
Finance Guy: That’s nuts.
From the Detroit News article, it seems Kerkorian only discussed this deal with Ghosn, not Renault and it’s board. Ghosn might be looking for his next company to save at this point and what better company to save than GM? Renault has approached Ford, looking for a North American car manufacturer to complete it’s global alliance. GM doesn’t exactly have a strong history of global alliances (look at Fiat, Subaru, etc). And GM is constantly hammering that it is an American company, so why would it take a huge investment from a French company? Wagoner certainly doesn’t want Ghosn around because it won’t be long until it would be Ghosn’s. I don’t see GM accepting this deal.
Another Example of ???The Demise of American Management??? – 3 Auto CEOs go to Washington.
If GM had some “predictability” they would have taken care of K.K by now.
http://qualityg.blogspot.com/2006/06/another-example-of-demise-of-american.html
I’m so not feeling this “Ghosn to save” GM thing. I can’t see it happening, for lots of reasons. For one thing, Ghosn doesn’t want to take GM into bankruptcy any more than Rabid Rick. Maybe later…
As a former Nissan Salesman I gotta say that Cappy Kirk’s letter causes much worry amoung the rank and file on the ground selling Nissan’s product. I mean people come to Nissan wanting to not buy a domestic, how much does that evaporate if GM was part of the fold?
It’s almost a right of passage that people show up on the lot and run down the domestics. Import snobs….
As was said in a prior editorial re: Chrysler/Mercedes…. “hey Buddy, wanna buy an expensive Chrysler?”
The first thing that popped into my mind after hearing this news was something along the lines of, “Oh no, poor Nissan. Don’t do it!” That type of reaction from a someone like me cannot be unique. However, just a few seconds of rational thought brings up all the likely ramifications of such a deal. It looks like bunk or some clever move by Kerkorian to get Wagoner to do something. Anything that doesn’t make GM’s situation worse. Well, the stock price jump is also a nice angle.
Trying to understand your post FinanceGuy. I understand that 590 is credit score, but what do you mean by “$8000 to $9000.00 over MSRP advances are not uncommon”?
FinanceGuy: Getting the customer out of the car ain’t gonna be your problem! It’s Repo man when the credit-challenged customers default on the loans, which will be SOON. Robert is absolutely right: It’s the sequel to Mitsubishi.
To JSForbes: Those with outhouse credit may get the free interest, but the dealer sells the vehicle well over MSRP because they can. I don’t think this is as common as he suggests, but “buy here, pay here” lots selling beaters do well because the customer can’t get financing anywhere else. And it’s even better for dealers to finance a guy w/sub 500 beacon scores at 0% because these customers are used to paying rates in the teens.
MSRP is the manufacturers suggested retail price.GMAC is approving loans on marginal people with massive negative equity and letting them roll it into new loans.Its not unusual for for some with strong credit to roll over some negative but on these marginal and sub prime people its crazy.For instance I put a guy in a car that with a MSRP of $31825.00 after taxes and negative equity he is financing right at $41200.00. for 72 months at 0% this was a marginal customer with a 615 FICO
Any time I see “investors” buying any public corporation, I just get it through my head that they are wall street “buy the whole and sell the sum of the parts for more than you paid for the entire pie”. It’s old it’s wall street at it’s financial best and it is disaster for the target company. Notice, that weak companies are the prime target for these takeovers. I can’t even begin to know whether Wagoner Lutz and company have an even chance of pulling this turnaround off. But I do know the chance just got slimmer and longer with the arrival of KK and his money. As for Nissan (I just bought one), if another blogger Delorenzo is even partly right (he waxes on about the self destruction of Nissan because of their recent Nashville hdq. move being a disaster), then Nissan has too full a plate to lend expertise to another venture (they apparently lost 40% of the US staff that stayed in Cal.) So here you have it. Delorenzo thinks Nissan is going down, Truth about cars thinks GM is going down, what do they say about the blind leading the blind? Or maybe all these pundits got it wrong. Go figure.
We arent financing customers over MSRP to gouge them its that they owe much more on their vehicles than they are worth.We never charge above MSRP even on Solstice which we very easily could and plenty of dealers do.My post pertain to how desparate GM is to move vehicles.
A deal with Nissan/Renault might just be a wild fantasy of the senior GM execs, but I must admit that I’d love to see even a small dram of Ghosn’s influence on GM, however imperfect it may be.
Look at the new-generation Renault cars. The styling of virtually the entire range would make Chris “Mangle” Bangle’s work at BMW seem timid (and yet Renault’s work is better-executed). This is also a company that makes the Modus, a subcompact with a sliding door. Read that again: a subcompact with a sliding door. Any company willing to so completely overturn conventional wisdom is the perfect antidote to GM’s head-in-the-sand approach.
In May, Forbes magazine (May 22 as I recall) ran a very well-written and insightful piece on Carlos Ghosn (can’t remember the writer’s name). He was asked if he’d like to be allowed to “save GM” and what he might do. He is an intelligent and savvy enough man, that he deferred, saying only he’d probably welcome the challenge and that was it.
This site has talked about leadership and Mr. Ghosn has it in spades – real leadership not just flash. Emersen once said, “Great nations, great men, have not been boasters or buffoons, but have understood the terror of life and armed themselves to face it accordingly.”
Mr. Ghosn has been described as ruthless, “Le Cost cutter” according to sources Jamie Kitman of Automobile had. Well, if he did get involved with The General, he’d do whatever needed to be done. I could see it happening; but only if the word “bankruptcy” was the next day’s headlines in the NY Times business section.
JFingas: I’m afraid the Modus is NOT “a subcompact with a sliding door” – it has 4 perfectly conventional doors. Either you’re mistaking it with the Kangoo (a small van) or with the… Peugeot 1007
JFingas,
As someone who travels a lot on business and family ties to Europe (Luxembourg) I make it a point, for fare savings to travel to the next big airports away from LG (the leg from Paris or Frankfurt to LG proper is exorbitantly expensive) and rent high end EU cars for driving comparison.
Before hand: European cars (not currently sold in the US) are good!!! In our day and age there are no inherently bad cars anymore only different cars for different tastes.
Whether is is a top of the line Opel, Lancia, Fiat, Alfa Romeo, Peugeot, (especially) Citroen or Renault, they all have “something”. Lol. I make it a point NOT to rent a car already sold in the US. (exept for the occasional non- 155mph limited versions………….)
Some are a bit quircky, maybe, styling wise as you mentioned, but fit and finish, inside and out, safety equipment, performance all rank or surpass what I am used to from the run of the mill US imports, be they from japanese or korean origin. Especially the high displacement diesel engines had me at “hello”.Lol.
My round trips are usually 300 miles (450km) between airports. It is simply amazing NOT to see the tank needle move at all. I never had to stop for fuel, come to think of it, in Europe for the past 10 years!! I get a rental with a full tank and it is still half full (I am an optimist, lol) when I return the car.
My father who owns a 5series diesel swears he gets 650 miles out of a full tank!!!
POLITICS is what keeps European cars out of the US. The lobbyist for Ford & GM must feel like the lone Roman defending the bridge!! If we were to get european cars and SUV’s (Touareg V10 diesel comes to mind) in here that are not currently sold in the US, well I predict that Ford and GM between the asian and european imports are not selling a single car anymore!!!
The Detroit two would have to solely rely on trucks and pick up’s and we all know how they sell lately………….
Have another EU company run GM might not be a bad idea after all. Just make it a german one!!! VW pretty please!!!!!
Ironically the ONE “car” that we could do without from Europe will make it here: The SMART!! If people get to “identify” the not-so-SMART as an equation to a european car, even be it a sub-compact, it will single handletly set back the more viable cars to make it here. Id’t take a Renault. any Renault with a bow tie badge over “THAT”!!!!!!!
negativeland:
Thanks for the correction. At any rate, the Modus is still an example of doing something different (the massive sunroof, the seating position, and so forth) with what could have been an ordinary design. And I don’t think anyone would disagree that cars like the M??gane have radical styling.
Its not politics that keeps many european cars out. Its just that traditionally, americans aren’t buying. Ford could bring the Ka, or the Euro Focus, in to the US, but they believe that American’s won’t pay for premium smaller cars. (Also, Ford US is notoriously cheap…)
This is starting to change. The Yaris, the Fit, Mazda5, Mazda6, etc, are very european cars brought into the US market. The Japanese makers are quite happily bringing the low end EuroCars into the US, with gas now at $3/gallon and no sign of respite.
But most of the european makers would just cost too darn much. Some UK pricing: An Alfa Romeo 159 ranges in price from 20k GBP to 28k. A BMW 3 series is 19k-31k GBP.
As pretty as that Alfa is, you’re talking 3 series money. Owchers…
One other possibility, its an attempt to fleece Ghosn.
Ghosn is a good turnaround artist (look what he did for Nissan), but his huge ego has proven to be a problem in the past: the headquarter move for Nissan US from the LA area to hickville has decimated the upper management/white collar infrastructure.
He can go on and on about cost savings, but once you are established in an area, and dealing with a part of the business where all the assets walk out the front door at the end of the day, you don’t want to move.
This could be an attempt by Kerkorian to sucker Ghosn into buying Kerkorian’s stock from him.
But I think Kerkorian screwed up bigtime. The proper thing for him to have done, a year or two ago, would have been to break up GM into two companies: GMAC and GM Cars, as a stock split, and then let GM Cars cease to exist in Chapter 11. But at this point, its too late: GMAC has been largely sold off, and the car company side is in such bad shape that such a split could never fly anymore.
JFingas:
Well, you’re right. Renault is quite daring at the moment – sometimes at their own expence. Cars like the Vel Satis (a wannabe e-class in a way) is too strange for people who can afford it and is considered quite a failure. But the M??gane is sure daring and pretty.
About the diesel consumption of an e39, i happend to own one – a 530d. I drive from Brussels to Marseille without stopping and still have a bit of fuel left to drive around town. I usually do around 5.8l/100 kms (you do the math…) on highways, driving between 140 and 160 km/h (85/100 mph).
FinanceGuy: Is this just a short term deal (they were hyping it on TV as only for the holida weekend) or is there sign of it extending.
If its short term, it won’t have much impact on the bottom line one way or the other.
But if this stays, thats a big, BIG deal.
My suspicion is the latter, GM seems to be in the “One more deal can bail me out” mentality.
I can’t believe there’s no one in the domestic car industry who could step up and change GM for the better, if given the reins to do so. Is there something much more sinister in the character of what American business has become? MBA’s at the top of a business seems to be a sign of the end times for the company in question. The essence of the mission stops being product and evolves to bean-counting. Just cash it out, take the money and run, and live happily ever after sounds seductive, but there’s more at play than just that.
This year’s car show in Chicago told me a lot. There was a huge banner located in the walkway between the east and west McCormick Place pavilions, welcoming everyone to the show. It was from Toyota. I spoke with the talking head from Ford who demonstrated the Reflex concept car, and asked him why, with a large Ford plant on the south side of Chicago building the 500, Ford didn’t leverage the opportunity to take that banner space and play themselves up as the ‘home team’. He seemed oblivious to the sign, and said something about looking into it for next year. But damn, he looked real good in that suit. Just like the rest of the team. Maybe a fish does rot from the head down.
People need to feel part of something really great, that they’re filling a real need and mission with some sense of passion. That has to come from the top. If you don’t feel that, then take your bat and ball and go home.
nweaver: Just looking at what the other domestics are doing, this GM deal is something that will stay around a while. Just before Memorial Day, Ford came out with it’s 0% for 60 months, free gas for rest of the summer, free maintenence for 2 years, etc. They described it as a Memorial Day weekend event. My friend and I joked at the time that Ford would have even given you the car for free if you asked nicely. That deal is still around in a variation.
While driving past a Dodge dealer last night in my town, I noticed an “Employee Pricing Plus is Back” banner in front. According to Peter DeLorenzo at autoextremist.com, Chrysler is planning on keeping it’s program until Labor Day weekend.
So GM is almost certainly going to have to keep this program around the rest of the summer at the very least. They might even have to add some more incentives like free gas (and make it a national promotion, not just one in certain markets), free maintenence, loads of cash, etc.
The more things that unfold in this great American mystery of the
General Motors that can’t, I keep wondering about this money machine Cerberus. Who are the people in back of this company?
I don’t care if Nissan is involved – getting in bed with Renault is like getting in bed with a hooker with the clap. Those idiots have been repeatedly chased from the US for goofy looking, self-destructing piles of crap. They only survive because the French would push a French car 10 miles rather than drive anything else a mile due to the fact that they believe anything French is great and the French government has always propped them up. They also sell fairly well in Africa – a market that nobody else even cares about. Big deal – you’re number 1 in Zambia. They’re a sub-brand in the rest of Europe – the last good car they had was the previous generation on Megane and they hosed that up with the new styling. GM will go the way of AMC – they’re both in about the same shape – when Renault comes riding in to save you, it’s time to put the gun in your mouthand pull the trigger.
Don’t sugarcoat it stu. Give it to us straight.
FinanceGuy: I sure understand your unease, and appreciate the inside stories. But I think the person left holding the bag of repo loans may not be so obvious. It is obviously not the dealership, and if I remember the details of the GMAC sell to cerebrus, it is not GM either.
Seems to me that GM agreed to send a good portion of GMAC’s profits to Cerebrus for the next couple of years — so letting GMAC authorize stupid loans in order to move cars is no skin off GM’s back, at least in the short term.
You can’t blame GMAC for lowering the credit standards. It sells cars.
I’m in the subprime mortgage industry, and am amazed at some of the latest products mortgage companies have been selling. Interest Only, negative amortization, 40 year, 50 year loans. It scares the crap out of me. Of course, the more loans default, the better we do.
Auto Finance has it’s bottom feeders. They’ll make it work.
We’ve heard it a few times in discussion, if GM reinvents itself, Chevy and Caddy will survive, the rest get dropped. Let’s hope they raise the bar on their Chevy products, otherwise they’d have to bring back Oldsmobile! I mean, at least one American manufacturer has got to push style and technology without the luxobarge-conservative aesthetics that we’ve come to expect from Caddy. Olds used to be as cutting-edge as the General would dare venture, and better performers than Pontiac, but some misguided badge engineering through the eighties sealed the brand’s fate. Now that same logic is sinking the entire ship -and killing Saab too.
Caffiend, forgive my ignorance (and tangent), but why exactly is a 40-year or 50-year mortgage scary? Do they not have fixed-interest rates? With real estate values increasing faster than pay (especially here in Orange County), you can’t afford a home on a typical 30-year loan (though my wife and I did opt for a 30-year fixed).
Just look at the automobile industry. Ten years ago no one really offered anything more than a 60-month loan. Now you can finance 72 and 84 months. Car prices have increased dramatically over the last 10 to 15 years.
Hell, most mid-level compacts cost over $20,000 now and mid-size sedans over $25,000.
Lending institutions have to be creative and flexible (to an extent), otherwise no one will be able to buy anything.
One thing to remember: Only HALF of GMAC was sold to Cerberus…
It wouldn’t suprise me if a lot of the loans are “If they go bad, GM is stuck with the bag.” Why did the finance company make money even at 0% loans? Because the cost of the loan is charged to the car side, not the finance side.
Aditionally, Cerberus is NOT stupid. And they really don’t care whether GM lives or dies as long as they make money.
If there IS a big amount of defaulted loans (it seems like with “some buyers won’t qualify” find print instead of “for highly qualified buyers”, and with FinanceGuy’s description of “Anyone with a pulse”) a year or three from now, I supect the contracts are written so it is GM, not Cerberus, who’s left holding the bag.
Its more a continued symptom of GM’s “Just One More Car” holdout mentality. They tried it with discounting (which frontloads the cost), they are now doing it with financing and gas discounts (which backload the cost).
RF: I suspect that the choice of discounting this time is another sign of just how bad GM REALLY is underneeth it all. These backloaded costs cost more in the future (the “gas promotion” can cost $2k-4k+/vehicle, given that it attracts those who put a LOT of miles on gas-guzzling cars, and the finance promotion is the bomb which killed Mitsubishi USA), but GM’s continued mantra is “The next year will be better”, and they need to just sell enough to make it through.
The more desparate they are to keep the “just one more car to sell” pholosophy (0% for 3 years on the new Tahoe, Avalanche, and Suburban! Heck, Mazda didn’t do any better for me on a Mazda6 a couple years ago!), the more tehy are circling the drain.
Some details: 0%/3years on Tahoe, Avalanche, Suburban. 0%/6 years on just about everything else but the Vette. 0%/3 years on the Yukon/XL/Denali line. 0%/6 years on virtually everything else.
Even Cadillac is getting into the game. 0% for 6 years on CTS-V and a bunch of others.
How much do these promotions cost GM? A little bit of number theory:
Lets take a $40k loan at 0% for 6 years (I’d like a CTS-V, say)…
At 0%, it costs me $555/month. At 6% (market rate), its $660/month. So its not that big a discount to me in the “per month” category.
But it is overall. Its $7500 difference in interest payments over the lifetime of the loan. Even discounting that by 6% at 3 years, that a $6500 cost to GM to underwrite that 0% loan instead of a market-rate loan.
But that is $6500, which, although it shows up on the BALANCE SHEET immediately, it doesn’t impact the cash flow immediately. So GM would rather do a promotion which costs $6500 in the future, than $3000 today.
Interesting, eh?
I know the Cerberus-GMAC deal was very complicated from what I remember. There were a lot of out-clauses built in, as RF has described in his article. I thought I remembered something about GM still controlling the majority of the automobile finaning arm of the venture. So I would guess GM is on the hook for these deals.
Robert….your spot-on about KK’s ploy to talk-up the stock. There is clearly no “synergies” for a Ren-Niss-GM deal. It’s almost as ludicrious as the talked-up “synergies” between Fiat-GM in purchasing and powertrain. However, I do believe KK is signaling Rabid Rick & team that alternatives exist to their leadership. And that the alternatives (Ghosn) is interested.
ktm,
The average age of a first time home buyer is 32. So you’re paying off your house at 82! Umm, I don’t plan on working in my 70’s, much less 82. I don’t think I’ll be living into my 70’s, but that’s besides the point. But, yes it gives those unable to buy a chance. Yes, you can refi. But you’re paying interest for an extra 20 years!
From: http://www.bankrate.com/brm/news/mortgages/20060427a1.asp
“But just for grins, let’s compare a 30-year fixed-rate loan with a mythical 50-year fixed. For a 30-year loan of $300,000 at 6.5 percent, principal and interest cost $1,896.20 per month. A 50-year loan for the same amount and at the same rate costs $1,691.15 per month in principal and interest.
The 50-year loan costs $205 less per month, but the payments stretch out for 20 years longer and will cost a total of $332,058 more.”
Ouch.
Robert: while I agree with much of what you write, this line doesn't make sense: "Of course, there is one important benefit to Captain Kirk’s bold moves: cash". If Renault-Nissan buy 20% of GM, the money doesn't go to GM, it goes to the stock-holder that sells them their stock. Just like when Captain Kirk bought his 10%, GM didn't get his cash, just the thorn in the side. With 20% more on his side the thorn would be that much bigger! The deal doesn't make any sense but Kirk has had Wagoner on the run all year. Its like watching a chess match and Kirk just said "check-mate". We'll see if Wagoner has any moves left.