Experts: GM-Ford talks sign of the times

[Foxrac]

By DAVID N. GOODMAN, Associated Press Writer Mon Sep 18, 6:00 PM ET

DETROIT - General Motors' talks with Renault and Nissan on a possible alliance — and reports Ford may be pursuing a megadeal, too — show how automakers constantly turn to each other even amid fierce industry competition.

GM and Ford declined to comment Monday on an Automotive News story that their high-level executives discussed a merger or alliance. Ford Motor Co. also declined comment on last month's Wall Street Journal report that Ford proposed its own deal with Renault and Nissan.

In July, General Motors Corp., Renault SA of France and Nissan Motor Co. of Japan announced a 90-day review of a possible alliance among them.

Auto executives talk frequently about "what-if scenarios" and possible deals large and small, said David Cole, chairman of the Center for Automotive Research in Ann Arbor.

"These kind of discussions go on all the time," Cole said. "Collaborating ... is part of how they're doing things."

These talks have yielded a growing number of joint efforts on everything from hybrid vehicles to better automatic transmissions, he said.

GM and Ford have been slashing their work forces and closing plants in efforts to reverse multibillion-dollar losses in the face of tough competition from Asia-based automakers. On Friday, Ford announced deeper job cuts as part of its "Way Forward" restructuring plan.

GM lost $2.9 billion, or $5.19 per share in the first half of 2006, while Ford lost $1.3 billion, or 70 cents a share.

Both companies declined to comment on the Automotive News story that quoted several unidentified people who said senior GM and Ford executives had begun talks in July but that the talks are not taking place now.

"My job is to keep everybody focused on our Way Forward plan and accelerating our results," Mark Fields, Ford's president of the Americas, told The Associated Press on Monday. "If we discussed all the speculation that was out there, I think we'd probably spend a couple of days."

GM spokesman Brian Akre said company officials "routinely discuss issues of mutual interest with other automakers." He said such talks are private and "in many cases do not lead anywhere."

Cole said an outright GM-Ford merger is unlikely and said that the companies carefully weigh antitrust issues during the lower-level cooperation that now takes place on such issues as hybrid vehicles, production technology and components.

"It would surprise me if there were a coming-together on the grand level," said Cole, but said Ford and GM very well could start more joint efforts similar to their current work to develop a six-speed automatic transmission

Even if GM and Ford don't merge, some other automakers will as the industry further consolidates, Cole said.

Ford's chronic labor cost problems and its shortage of interesting models give GM little reason to seek a close alignment, said analyst Charles Fleetham of Project Innovations in Farmington Hills.

"I don't see it from a business standpoint," he said. "They have the same high health costs, high union costs, ineffective white collar work force that they want to get rid of."

Ford shares fell 20 cents, or 2.5 percent, to close at $7.82 on the
New York Stock Exchange, while GM shares fell 18 cents to $31.48.

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Associated Press Writer Sarah Karush in Detroit contributed to this report.

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On the Net:

Ford Motor Co.: http://www.ford.com

General Motors Corp.: GM Cars - General Motors Corporate Website - GM Customer Service

Experts: GM-Ford talks sign of the times - Yahoo! News

 

[Buckdodgers]

Wanna Know why people arent buying from GM & Ford anymore.Cause theyre not making what the people want.Like these cars

They make what they wanna make,Not what the public wants such as Hybrid & Solar cars or a Smaller car gets 60 MPG because of High Gas Prices.You see the People DO NOT WANT A Gasolene engine car that gets only 25-35MPG.They want something like a car doesnt make trips to the gas station so often.

 

[sequoias]

General Motors-Ford is making a huge mistake! They need to stop buying other car companies. IT will make them HURT worse and even lay off more people out of work, lose lot more money! They need to downsize and go back to where they started, growing bigger isn't the answer they're looking for. What dumbasses!

 

[MilitaryGirl83]

I only like Ford Focus.. but other cars.. so damn ugly!

Wanna Know why people arent buying from GM & Ford anymore.Cause theyre not making what the people want.Like these cars

They make what they wanna make,Not what the public wants such as Hybrid & Solar cars or a Smaller car gets 60 MPG because of High Gas Prices.You see the People DO NOT WANT A Gasolene engine car that gets only 25-35MPG.They want something like a car doesnt make trips to the gas station so often.

 

[sr171soars]

General Motors-Ford is making a huge mistake! They need to stop buying other car companies. IT will make them HURT worse and even lay off more people out of work, lose lot more money! They need to downsize and go back to where they started, growing bigger isn't the answer they're looking for. What dumbasses!

What is killing both of them is the unionized jobs. In this day and age of globalization, the union's time has come and gone. I agree they need to downsize anyway and grow their business again. They need to focus on what the consumers want and keep an eye out for the trends in energy too. It was so stupid to built SUVs and big pickups only because gas was easy. Perhaps, it is better to see both Chevy and Ford disappear as a lesson to other companies. Neither have shown that they understand the business anymore.

 

[Foxrac]

General Motors-Ford is making a huge mistake! They need to stop buying other car companies. IT will make them HURT worse and even lay off more people out of work, lose lot more money! They need to downsize and go back to where they started, growing bigger isn't the answer they're looking for. What dumbasses!

Really? I don't know about how's dumbass with between GM and Ford.

That's interesting to get know about your opinion but I was shocked that GM and Ford want to merge for some reason.

 

[Buckdodgers]

What is killing both of them is the unionized jobs. In this day and age of globalization, the union's time has come and gone. I agree they need to downsize anyway and grow their business again. They need to focus on what the consumers want and keep an eye out for the trends in energy too. It was so stupid to built SUVs and big pickups only because gas was easy. Perhaps, it is better to see both Chevy and Ford disappear as a lesson to other companies. Neither have shown that they understand the business anymore.

Unions help the Lil people get better pay like $15 a Hour.Listen ask your boss you want more money he will say NO WAY to you.Look baseball players always get what they want, NFL players always get what they want,NBA players always get what they want and NHL players always get what they want. And Unions do almost the exact samething.Look at teachers unions theyre strong cause the local democrats will give them whatever they want you dont see public schools or School bus Drivers being Laid off now do you? If Ford workers want more money GO ON STRIKE WHEN THE ECONOMY IS GOOD!! And Demand Job Security like My dad did back during the 80s when the big UAW Workers strike at GM!! I just heard on the news The Boston Teachers Union got a 10% raise because of the Liberal Democrats there.Now Ford,GM and Chrysler workers need to Vote for the democrats this election so they can put people back to work and Nancy Peloski will work for the working class when shes the speaker of the house.

 

[sr171soars]

Unions help the Lil people get better pay like $15 a Hour.Listen ask your boss you want more money he will say NO WAY to you.Look baseball players always get what they want, NFL players always get what they want,NBA players always get what they want and NHL players always get what they want. And Unions do almost the exact samething.Look at teachers unions theyre strong cause the local democrats will give them whatever they want you dont see public schools or School bus Drivers being Laid off now do you? If Ford workers want more money GO ON STRIKE WHEN THE ECONOMY IS GOOD!! And Demand Job Security like My dad did back during the 80s when the big UAW Workers strike at GM!! I just heard on the news The Boston Teachers Union got a 10% raise because of the Liberal Democrats there.Now Ford,GM and Chrysler workers need to Vote for the democrats this election so they can put people back to work and Nancy Peloski will work for the working class when shes the speaker of the house.

There is some truth to what you say but at the same time it is at their expense. Unions are not flexible to adapt to the realities at the workplace. Because of this, they have trapped themselves into a box they can't get out of without serious adjustments. Just take GM or Ford for example, they pay really outrageous wages to factory workers that is not in line with the US nor the world at large. That puts the companies at a competitive disadvantage when other car companies which are not unionized. I understand that Toyota pays about $40 per hour per person at their American factories. That isn't shabby by any means. Now GM/Ford pay some $65 per hour per person. Now, how does GM/Ford complete against that? They shut down factories and let people go to try to get their costs in line with their competitors. No matter what they do, they can't win. No wonder Toyota is winning that battle on top of the fact they know how to make good cars that people want.