By John Horner
October 7, 2008 -
The Wall Street Journal is calling attention to the massive cash piles sitting around the offices of big oil re: falling stock prices. The solution to this problem? “Mr. Flannery argues that Big Oil will need to put cash into acquisitions to restore the battered share prices.” ExxonMobil alone is sitting on $39b despite buying back its own stock at a rate of $8b per quarter (it’s repurchased $218b of its shares over the past several years). General Motors’ total market capitalization of under $5b, and falling, makes it a target. OK, they have a few liability “issues.” But what’s good for GM is good for ExxonMobil. By deferring two months of its own stock buy backs ExxonMobil could gobble-up the world’s once and future king of cars. Think of the synergy! From exploration through production, marketing and finally right out the tailpipe; a truly global and integrated oil monster. Chevron, never one to be outdone by its sister company (both were once part of Standard Oil), is said to be eyeing Ford. With plunging demand dragging oil prices from $140 per barrel down to around $90, something must be done! Or not.
Subscribe to New Content Alerts19 Comments on “ Wild Ass Rumour of the Day: ExxonMobil to Buy GM and Become an Integrated Producer/Consumer ”
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POWERED
October 7th, 2008 at 11:44 am
So, that means the Volt will never see the light of day? I mean, why should a company owned by Big Oil make cars that were fuel efficient?
October 7th, 2008 at 11:49 am
So, that means the Volt will never see the light of day? I mean, why should a company owned by Big Oil make cars that were fuel efficient?
Because profits are profits, and the alternative is having Toyonda making all that “green” at Big Oil’s expense.
October 7th, 2008 at 11:51 am
One of the greatest modern day creators of capital paired with one of the greatest destroyers of capital.
For every yin, there must be a yang, right? lol
October 7th, 2008 at 11:52 am
I’ve been waiting for this. GM/Exxon could run up huge losses on the car side to offset any oil profits. And you can’t attack big oil when employ so many union workers.
October 7th, 2008 at 11:56 am
anything that gets rid of Wagoner is good in my opinion.
October 7th, 2008 at 11:58 am
Or perhaps it’s a stroke of genius? Since they already own the battery technology, perhaps they would charge outrageous royalty payments for everybody else, and subsidize their own brand offering, The Volt? That would somehow lessen the gap between the Volt and the Prius…
October 7th, 2008 at 11:59 am
This is an outstanding idea that could help big oil avert windfall taxes and could give them an avenue to patent or corner the market for the next wave of automotive fuel technology. The only problem I see is that big oil doesn’t necessarily have great business acumen. Their huge profits are more a matter of circumstance.
October 7th, 2008 at 12:00 pm
snabster :
October 7th, 2008 at 11:52 am
I’ve been waiting for this. GM/Exxon could run up huge losses on the car side to offset any oil profits. And you can’t attack big oil when employ so many union workers.
Maybe so, but whoever would want to deal with the UAW?
I’d sell my ExxonMobil stock, that is for sure.
October 7th, 2008 at 12:02 pm
Talk about the ultimate in vertical market integration. From wellhead-to-gas-tank.
I would like to think the oil & gas industry is smart enough to know the auto industry sux.
October 7th, 2008 at 12:05 pm
ExxonMobil is selling their gas station division because it’s not making enough money. Why bother with a company that’s not turning a profit?
October 7th, 2008 at 12:24 pm
Hm, would there be antitrust issues if ExxonMobil offered a different gasoline price for GM purchased vehicles if they own GM?
October 7th, 2008 at 1:08 pm
Buickman :
October 7th, 2008 at 11:56 am
anything that gets rid of Wagoner is good in my opinion.
Really? I submit Lee Raymond:
http://www.tinyrevolution.com/mt/archives/lee_raymond_lg.jpg
October 7th, 2008 at 1:11 pm
Pipe dream.
October 7th, 2008 at 1:12 pm
Robstar, they could get around it by offering a gas card just like Chrysler did “only at participating stations”
October 7th, 2008 at 1:16 pm
“Really? I submit Lee Raymond:”
Wow, it looks like they picked him right out of central casting to play the part of “Big Oil Fat Cat”.
October 7th, 2008 at 2:07 pm
You’d think that with a retirement package worth $400 million, Mr. Raymond could afford a new tooth.
If this buyout happens (and it won’t) it would be a great time to reorganize brand names and model lines. I’ll be waiting anxiously for the 2012 Exxon OldsMobil.
sorry…
October 7th, 2008 at 2:08 pm
Hey, Lee Raymond likes food and money! He ate a lot of food and made a lot of money.
Compare him with the most famous vegetarian non-smoker: Adolf Hitler.
October 7th, 2008 at 3:04 pm
Considering that the environmentalists still won’t forgive GM for killing the EV1 in favor of making Hummers, if this happens, kiss any attempt to make good with the Sierra Club/Greenpeace crowd goodbye…
October 7th, 2008 at 6:43 pm
@Ingvar: why should a company owned by Big Oil make cars that were fuel efficient?
Because gasoline isn’t the only byproduct of crude oil going into cars.
Cars need motor oil, plastic, energy to produce them, asphalt for the roads etc… Even a car that ran on water would benefit the oil companies.