According to BusinessWeek, a senior General Motors Corp. (NYSE: GM) recently tossed an idea to the troubled automaker: Consider a merger with rival Ford Motor Co. (NYSE: F).The idea, which the magazine says was shot down at a GM meeting, underscores the problems facing the two American auto icons as consumers pinched by high gas prices dump their SUVs and pick-up trucks in favor of smaller cars. The swiftness of that transition caught just about every auto manufacturer off guard, although Toyota Motor Corp. (NYSE: TM) was better prepared with its lineup of smaller, more fuel-efficient vehicles.
A possible deal would be a large distraction into both companies while doubling the amount of problems a combined auto colossus would face. A long-term combination may have indeed proved quite fruitful, but are both companies seriously ready to have their empires combined? Maybe in 2013, okay?
Financially, if the deal makes sense for the long term, look for this rumor to surface again in the near future. Combining the incredibly high overhead and capability to weather fickle customer preferences in vehicles would never be a bad thing. right now, the timing is bad -- but it could be better in reach of five years. Is the U.S. ready for a single, publicly-held American auto manufacturer? I'm not sure, and there would be mountains of convincing to do if a merger ever comes up again. My bet is it will.
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Reader Comments (Page 1 of 1)
6-27-2008 @ 10:54AM
gumbo koontz said...
I emailed to Investor Relations at General Electric urging them to consider buying General Motors outright. Or Ford Motors. This will double General Electric revenues.
6-27-2008 @ 12:02PM
BOB said...
HOPE THEY DO AND I HOPE THEY RESPOND WHEN SOMEONE TRIES TO CONTACT THEM WITH AN IDEA. MR. FORD, THOMAS EDISON AND BILL GATES HAD AN IDEA ONCE, REMEMBER. I HAVE ONE AND I TRIED TO CONTACT ALL THREE WITH AN IDEA FOR A ELECTRISC CAR THAT WOULD GO ALL WEEK ON ONE CHARGE AND I DID NOT GET ONE RESOPNSE FROM ANY OF THEM?
6-27-2008 @ 1:15PM
Bill Dollar said...
Taking two wounded ducks and gluing them together does not make and eagle, now does it! Given how bad their cash flows are for the long haul, both companies will be in bankruptcy in less than 4 years. After that horrible and painful event then a smaller combinatioin of both companies best products might make some sense in combination. Chrysler will merge with one of the Korean automakers within three years and their name will end up in the dust bin.