It’s no secret that the domestic automakers are facing one of the roughest stretches in industry’s long history, but the situation could be even direr than it looks from the outside. Here’s the proof: General Motors executive have brought up the idea of merging with Ford during recent meetings.
Although the proposal never gained much traction within GM – according to Business Week — the fact that execs brought up the topic shows the domestic automaker are scrambling to find answers to their financial problems.
Though a merger is unlikely, the idea is not unheard of in the Motor City. Ford nearly teamed with Italy’s Fiat and GM has toyed with the idea of a tie-up with both Chrysler and Nissan . Ford and GM have also reportedly met in the past to discuss a possible merger, although nothing came of it.
The idea of a GM-Ford merger is obviously a complex proposition that would have both its pros and cons. A tie-up would create a company with $350 billion in annual revenue and the savings from overlapped overhead costs would save the company billions.
However, because of the financial states of both companies, a merge could have the same effect as tying two sinking ships together, only leaving a bigger mess to clean up. The other huge con standing in the way of a merger is the enormous product overlap that would be the result, not to mention the 12 different brands that would fall under one corporate umbrella.
