Report: General Motors and Ford considering merger

[siko]

Report: General Motors and Ford considering merger

Executives from Ford and General Motors have discussed a possible merger or alliance, trade publication Automotive News reports in its Monday, Aug. 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.

Source: lln


-------------------


... wow, this seems unlikely to happen, but it truly indicates in how a fragile state the US companies seem to be in.

 

[bmer]

Hmmm... Two giants with enormous financial problems merging, would it work?

 

[bmwrules]

They are considering it because they share a lot of parts suppliers. So if one went bankrupt the would cause a severe strain on the suppliers, which would in turn hurt the other company.

 

[EnI]

Maybe they think a minus (loss) and a minus (loss) gives a plus (profit).



j/k

 

[NarutoRamen]

This could work, but they seriously have to get rid of some stupid brands. For example, Buick and Mercury. Where I live and many other places I've been, I don't see these companies' cars. I see a mercury cougar once in a while, and buick is ever rarer not to mention they make ugly cars. Seriously, these companies need solid well designed products...if a merger can bring them that then thats good because I would hate to see thousands of jobs being lost because at the end of the day it will have a tremendous effect on US economy...since I live here, I'm not too happy about that.

 

[bmer]

They would have to choose between GM's brands and Ford's directly competing brands (for example Cadillac vs. Lincoln) and as a result many known makes would disappear. At least I don't think they could make all the brands different so that they wouldn't have to give up on most of the directly competing ones.

 

[kovachian]

I think it'd be a smart move. Struggling companies helping each other out might just work for the benefit of both, and history shows that German car makers are not unfamiliar with that idea. Whether GM and Ford are aware of this, probably not but it doesn't matter. Honestly I hope they both prosper.

 

[Deutsch]

This is just for economies of scale guys, nothing more.