Ford, GM Reportedly Discuss Merger, Alliance

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Originally posted by lght1:

While a merger may not fix the "junk" they make, but what will fix the "quality" construction of my neighbor's Camry's drivers side door.

Is oxidation a new toyotas feature ?

BTW, the last three of my GM "junk" cars combined for a total of 750,000 miles. Luck....?

Zzzzz. You will have plenty of "quality" stock to choose from and very little competition - enjoy.
I can drive ANY car(s) for long mileage - it's the amount of money it takes, the number of calls to AAA and how much I spend on repairs that counts. But obviously, with your vast experience with Toyota's - your neighbor's door and all - you know more than all the dumb people buying Japanese...
It all makes sense now. If Ford and GM combine operations they might release a Mustang Shelby GT500/GTO R hybrid.
Two drunk men leaning on each other, is what this scenario describes.

Btw, I'm sure my Saturn could last 250K+ too, it's just a matter of when you want to "let go" and stop dealing with repairs, as minor and simple as they may be. It all gets annoying after a while.

Originally posted by tenderloin:
Ford, GM Reportedly Discuss Merger, Alliance

CHICAGO (Sept. 18) - Senior executives at General Motors Corp. and Ford Motor Co. have discussed a merger or alliance, industry newspaper Automotive News reported on Monday.

Citing several sources familiar with the talks, the paper said it was not clear whether the negotiations will bear fruit.

As of now, the two companies, both struggling with shrinking market shares while restructuring operations, are not holding talks, and one source said there is a slim chance that anything will come of the situation, Automotive News said.

GM and Ford declined to confirm any talks.

"As we've often said, GM officials routinely discuss issues of mutual interest with other automakers," GM spokesman Brian Akre said. "As a policy, we do not confirm or comment publicly on those private discussions, which in many cases never lead anywhere."

Ford spokesman Tom Hoyt said the automaker does not comment on speculation.

On Friday, Ford said it would slash $5 billion in costs and one-third of its work force as it warned its auto business would not make a profit in North America for another three years. It also suspended its dividend and pledged to revamp a vehicle line-up seen as weak by analysts.

However, the No. 2 U.S. automaker ruled out an immediate sale of its Jaguar brand, disappointing investors who wanted Ford to press ahead with asset sales to raise cash, sending shares to their biggest single-day percentage decline in almost four years.

Earlier this month, Ford named Alan Mulally, a former Boeing Co. executive, as chief executive, ending the troubled five-year stint of Bill Ford Jr. as the company's operational head.

GM is in the midst of its own restructuring as it tries to recover from a $10.6 billion loss in 2005.

Turnaround efforts at the world's largest automaker have gained traction this year as 34,400 workers -- about a third of its work force -- have accepted early retirement and buyout offers. GM is also closing 12 plants.

Still, CEO Rick Wagoner is under pressure to show further improvement as GM studies a possible tie-up with Nissan Motor Co. Ltd. and Renault SA in which Nissan and Renault could buy up to a 20 percent stake in GM.

That deal, urged by GM's largest individual shareholder, billionaire investor Kirk Kerkorian, has been widely viewed as a means of prodding Wagoner to speed up the company's turnaround efforts.

Last year, GM and Ford agreed to jointly develop a new 6-speed transmission, which is in production in plants at both companies.


Tenderloin, what is the source and link for this? Thanks in advance.
Having owned both foreign and domestic vehicles, I would agree that the Japanese, who are being chased by the Koreans, who are being chased by the Chinese, who will likely be chased by the Indians build a car with more value of the money.
On the other hand, I would also agree that the American car companines can and have built some excellent products. In my opinion, U.S. Pick-Up trucks are excellent. The Corvette is simply the best super car in the world today that costs less than a quarter million dollars. I really like the styling of both Ford and Chrysler cars compared to the every-car-looks-the-same NiHoTa's.
Sadly, a merger may be inevitable in order for these two companies to survive. But if their joint effort would result in a car with GM powertrains, coupled to Ford or Chrysler styling and build quality comparable to the Japanese, with pricing similar to the Koreans, I think it would re-awaken the U.S. car industry.
Let's not forget that the '73 crisis killed off whatever was left of the old classic Hemis (along with many other muscle engines of the day) . . . after the emissions laws did their fatal damage to the breed.

Not that the current generation bears any real relationship to the classic 426 model. But it certainly invokes no images of efficiency or economy in the marketplace, either.

Like a freight train you could see this one coming.

Dr. Z. What a joke.

Originally posted by olefam:
But if their joint effort would result in a car with GM powertrains, coupled to Ford or Chrysler styling and build quality comparable to the Japanese, with pricing similar to the Koreans, I think it would re-awaken the U.S. car industry.

Ford and GM rely heavily on high profit margin SUV’s and trucks. How smart is that when demand for these products is directly linked to one of the most volatile commodities in the world (oil)? Sustained high prices result in decreased sales and revenue resulting in restructuring, layoffs, and plant closures. Wow, never saw that coming.

The Japanese had good quality small cars ready for the market when gas prices hovered at $3/gallon for a sustained period of time. American manufacturers have small cars but they do not have what it takes to sell cars these days. They are not visually appealing, with unique features, and high quality. They simply do not appeal to the masses.

Example is the Chevy Aveo – Who is this going to appeal to?

I own a Ford truck and wish the best for the domestics but I have to say, they had it coming.
OK, avette, my taste in cars isn't your taste. But the point was that a merger in and of itself may not be a calamity if it results in some world class products with very competitive prices.
The United States was built by folks who weren't afraid to take a risk or get their hands dirty. This nation needs to maintain it's ability to manufacture products that people around the world want to buy. If we fail in this we will simply be run over by nations who understand that the economic backbone of a country is its ability to produce a product, not push paper.
There's no way they'll merge...but an alliance is more realistic and practical.

Example, join hands to produce a competitive, lower cost Hybrid (or Fuel Cell) system in efforts to gain on Honda and Toyota who have a lot of designs locked up via patents already.
Mergers and acquisitions are the wave of the future (and of today). Global economics more and more are dictating that even the largest companies join forces, which usually serves to lay off 1/2 of each member's workforce. Exxon and Mobil are a prime example.

Cutting their workforce by 1/3 or more would be disastrous for the U.S. economy (which probably had a lot to do with failing talks between Ford and GM) but it's one of the factors that could save them both. Combining Ford's talent for eye appeal with GMs drivetrain technology could probably yield up a seriously desireable lineup of products, but how many of their hot-selling products would suffer from it? The F-150 has a loyal following of people that would not want it anymore if GM had a hand in its production. And what about niche cars like the Vette and Mustang? Ford is constantly throwing more horsepower at that car in attempt to raise it closer to Corvette specs. It would likely suffer extinction if it were forced to live in the shadow of the Corvette when the two companies merged. What becomes of all the GM clone cars shared by Buick and Pontiac? Where does Saturn fit in? A lot for each to think about, so don't expect a hurried answer from either party.
CBDFrontier06, I wouldn't worry about the Mustang being displaced by the Corvette. They're a different class of car at a much different price point.

You've pointed out what the problem with Detroit is though. The big 3 have spent all their time and energy competing with each other while the imports came in and developed a market from a different angle and with different vehicles.
Both companies have no choice but to adjust to the market demand. It is not a choice. If market demand for trucks and SUVs is lower than their production, then sooner or later production comes down. Hence the combination would allow them to both adjust production (down) and still remain a large company with a lot of resources. From that perspective merger makes sense.

However, the demand may continue to decline and even the combined company may keep shrinking. In that case merger simply buys them some time, postpones the inevitable shrink. Inevtiably they'll have to adjust to the market, not the other way around. The days of GM/F/C driving the market and controlling demand are gone. They need to accept this simple fact.

That means making drastic changes in designs, product types, manyfacturing setup, etc. The typical danger for larger old companies is calcification of the corporate knowlegde, thinking and actions. As GM and Ford hold onto trucks and SUVs, it would appear that the core problem is that they are dominated by engineers and executives who refuse to change and want to keep their current designs and practices at any cost. Even today there are mainframe computers around the world still working away in their 70s/80s view. Even today IBM sells mainframes trying to poertray them as relevant. However, mainframes are now a small niche, irrelevant.

GM/Ford risk becoming a small niche and irrelevant so long as the "old guard" is in charge. Concordantly the main benefit of the merger would be potential to dislodge the old guard and let some young hands take over. Of course, this could happen without the merger, but is less likely and more difficult. The merger reorg offers an easier means to replace bunch of old executives and engineers who refuse to change.

To have any chance of remaining relevant they have to:
1) reduce engine sizes to reduce fuel consumption
2) reduce vehicle sizes to reduce fuel consumption
3) develop hybrid tek
(for real and not as a token gesture)

Note that they need not discard all of their bigger machines. They do need to alter product mix towards smaller machines, leaving trucks and SUVs as a smaller niche.

The merger would present some opporutnities. They will still need people with ba115 to make the necessary changes.
While I admit, I am a german car kinda guy..... I would like to see GM and Ford get it together. If they made a reputable product that would hold its value, I would be proud to own an American made car again.
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