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Report: General Motors and Ford considering merger

09/18/2006, 7:19 AM

By admin

Executives from Ford and General Motors have discussed a possible merger or alliance, trade publication Automotive News reports in its Monday, Sep. 18, edition. The negotiations began in July after Nissan and Renault CEO Carlos Ghosn broached the possibility of an alliance among Renault, Nissan and GM, according to several sources familiar with the talks. It is not clear who launched the talks. One source says GM CEO Rick Wagoner contacted Ford Motor the day after Ghosn disclosed his plan. A second source disputes that.

In August, GM CFO Fritz Henderson discussed the proposed alliance with Ford CFO Don Leclair, said a source familiar with the talks. But it is not at all clear whether the negotiations will bear fruit. As
of now, the two companies are not holding talks, and one source says there is a slim chance that anything will come of it.

GM spokesman Tony Cervone declined to comment on the report.

“We regularly talk to a number of people in the industry regarding business opportunities of mutual interest,” Cervone said Friday, Aug. 15. “As a matter of course, we don’t comment on any of those because in many cases, they simply don’t lead to anything.”

Ford spokesman Oscar Suris also declined to comment.

To complicate things, GM is studying the Ghosn proposal to join the Nissan-Renault alliance. GM is two-thirds of the way through a 90-day study, which it is conducting with Renault and Nissan.

Ghosn made his proposal that GM join the Nissan-Renault alliance at the urging of Las Vegas billionaire Kirk Kerkorian, a major GM shareholder.

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09/18, 7:31 AM

posted by:

JohnnyBlazE

Very interesting….

09/18, 7:38 AM

posted by:

Hidden_Hunter

Never gonna happen

09/18, 8:04 AM

posted by:

pezones

this would be awesome

09/18, 8:34 AM

posted by:

slider5634

I think I’m having a bad dream. No, it’s a nightmare. AGHHHHHHHHHHHHHHHH!!!! Somebody wake me up!!!

09/18, 8:37 AM

posted by:

davidg1977

What would be the impact from a monopoly perspective and from a labor perspective? Would the FTC allow such an occurrance? If you want to talk about a way to break the union, put these two together and then completely spin off their manufacturing capacity whereby one company, “GM/FORD” is a designer/marketer and another company “LABOR” is a series of plants that would have to competitively bid on the production of each product line by cycle (3-5 yrs between redesigns/refreshes) and then they’d go to bid again? Competition would be fierce but with flexible manufacturing, it likely could be done…

I do, however, see this as yet another chess move to further intimidate the UAW into major concessions for the next round of negotiations much beyond any of the “buyout allowances” from this interim financial trouble renegotiations.

2007 could be a bloodletting if this and talks of continued Mexican/International mfg expansion go forward.

09/18, 8:38 AM

posted by:

goldfish

It’s a “general mistake”…

09/18, 9:27 AM

posted by:

wenge

Ford vs Chevy? Ha! I love to see how this would effect brand loyalty!

09/18, 9:30 AM

posted by:

1c3d0g

Well, they have cooperated before by jointly developing that 6-speed automatic transmission. It’s not totally impossible to see something like this happen.

09/18, 9:47 AM

posted by:

Richard

davidg1977, The FTC has been most sympathetic to corporate mergers of late. This merger would be allowed because it would be intended to save not just an American company, but an American industry.

09/18, 9:51 AM

posted by:

Andrew

Whatever would the Nascar fans do? ha!

Henry Ford just rolled over in his grave. Yet again.

09/18, 10:09 AM

posted by:

davidg1977

The FTC has been favorable of mergers when competition hasnt been sacrificed (see BLS/ATT merging b/c they don’t have customer overlap).

I also think you’d see huge lobby dollars spent by the UAW to keep this from happening.

Akin to the airlines, I don’t think that something like this could occur with two non-bankrupt companies. If a Chapter 11 happens for either, then that could change the outcome (See USAir/AmericaWest versus USAir/American Airlines).

09/18, 10:21 AM

posted by:

Toy Yoda

So what would they call the new company if it did happen?

General Ford
General Ford Motors.
Forge Motors.

I like the last.

09/18, 11:01 AM

posted by:

Richard

david1977, This merger would mean that at least some of Ford’s UAW workers would keep their jobs. If it is proposed and disallowed, the result would almost certainly mean that most of Ford’s UAW workers would lose their jobs. Also consider the fact that GM and the UAW actually have a pretty good relationship. It is not in the UAW’s interest to try to stop this.

To the contrary, it is very much in the UAW’s interest to ensure profitable American-owned auto manufacturers. The alternative is offshore ownership which is not particularly sympathetic to the veteran autoworker to which the UAW owes its existence.

09/18, 11:06 AM

posted by:

Jim in LA

it’s the end of the UAW as we know it, if it happens.

but even in this corporate giveaway environment we’ve been living in for the past 20 years, i don’t see this one happening. i see a Fiat-Ford merger before GM-Ford.

shudder.

09/18, 11:25 AM

posted by:

DaveO

Ford is smaller and will be able to make changes easier helping them get back on track. GM is a much bigger machine with a lot bigger obstacles to battle. Combining would be like two people grabbing each other before they jump out of the window. Neither is help to the other.

As for the UAW…who gives a rats ass? It is the antiquated system of unions that drag down companies in financial trouble. They aren’t ruling the company…and without consessions on their part then every last one of them will be out of work when the companies shut their doors and there will be no legal or contractual recourse.

09/18, 11:35 AM

posted by:

davidg1977

Please don’t think I pine for the UAW. I’m a hugely outspoken critic of those that think the company serves them and doesn’t want to work in a “at will” environment.

Look at the fringed wage scales of US-based Honda & Toyota plants versus that of Ford / GM. I’d be willing to say that that delta, likely 50-75% premium fully fringed, would get these guys in the black or damn close to it.

I can’t see a new GM/Ford plant anytime soon in the USA other than in a southern state which has shown proclivity for tax incentives and an allergy for unions.

09/18, 1:39 PM

posted by:

Ricardo Head

I think they should just let the UAW run the show and show us all how great the UAW can design and build cars.
.
Those union leaders always say they know whats best for business!

09/18, 3:00 PM

posted by:

Bonquisha Sheneequah Sharkeesha Shi-thead Jackson

Yeah right, who writes this ****?

09/18, 3:34 PM

posted by:

1c3d0g

Good God, Jim in LA, Fiat? :shock:

Shudder indeed! :-(

09/18, 4:50 PM

posted by:

LamborghiniZ

I don’t see this EVER actually happening. It’s too out there, these are two HUGE competitors, they would never merge. Impossible. Mercedes Benz and BMW wouldn’t ever merge and Ferrari and Lamborghini would never merge just like Ford and GM would never merge

09/18, 5:58 PM

posted by:

InvisibleEcho

Toy Yoda got to the snarky comment before I could make it. I don’t know if regulations in the US would allow this to occur much less logistics, but since I don’t have loyalty to either company I’m considering what it would be like to shove a z06 engine inside a mazdaspeed6…. or maybe even a AWD Ford Fusion… ahh I’m just talking out my ass. This would be the most complicated merger ever. It’s like merging Coke and Pepsi.

09/18, 7:27 PM

posted by:

Renton

LamborghiniZ- in the 60’s BMW was almost bought out by Mercedes, but Mr. Quandt help lead a stockholder something -or-other to prevent it. BMW would be long gone by now if that had not happened.

Did you ever think that Ferrari would merge with Maserati?

They are huge competitors, but one of them is about to lose.

09/18, 8:23 PM

posted by:

chevy490

gm wouldent have brought this up a merger would meen more pain for them and a easy way out for ford!! i belaeve this is just to getstocks higher honistly i do..
gm should buyout ford compleatly and then they would be a massive motor company.. wed beat the japs once again!!

09/18, 8:34 PM

posted by:

whitegold

“Which ‘Forge’ automobile do you want?”
“I’ll take the cream colored one that has no soul.”
“Yeah….which one?” “the one that’s more off-white.”

-Renton- not sure how serious your ? was- Maserati was owned by Ferrari and was brought back under Fiat last year, so it seems unlikely Maserati would go back and merge with Ferrari anytime soon…Maserati needs to just grow up already!
Say good bye to your freedom of choice if you haven’t already. Do you want to be able to choose, or have some CEOs indirectly making decisions for you in your everyday life? Sorry, they already own you. so by the time I would have grandkids, I’ll kill myself, and you all will be wearing the same unisex whitey-tighties, eating the same **** everyday, buying the same crap from the same store and popping the same prescription meds. have a nice life! Eat the blue pill, or was it red? Oh noooo!
I had this dream once, where Toyota and Ferrari didn’t merge, they just benchmarked. It was awesome for either side of the consumer spectrum. Then I woke up in an uglyass car labeled froge.

09/18, 11:59 PM

posted by:

Hal

Maserati and Ferrari are still both part of the Fiat group.

Hard to imagine that Bill Ford would be willing to give up control of the family business, he in particular seems very attached to it.

09/19, 2:19 AM

posted by:

Hal

the more i think about it the more i like the idea of Fiat buying Ford. Ford N. America would fit right into Fiat’s Case / New Holland line of farm and construction machinery. They could market Lincoln Towncars as pig haulers

09/19, 7:35 AM

posted by:

1c3d0g

Oh yeah, and you’ll be the first one to be hauled away, Hal. :-P

09/19, 10:39 AM

posted by:

RustedEmpire

I like how hal’s thinking…

honestly, GM/Ford is not a good idea. I really want Renault/Nissan to push a little further with gm and make it final…

I

09/21, 6:16 AM

posted by:

Aston_

Shezus that would kill the whole Holden vs Ford thing down here in Australia… Thats bad news!

 
 
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