General Motors is in talks with eBay (NASDAQ: EBAY) to expand the pair's partnership to include new cars.The Associated Press reports that "GM CEO Fritz Henderson said the company is working on an "innovative new partnership" with eBay Inc. to let consumers in California bid on vehicles as they would in a normal eBay auction or choose a 'Buy it Now' option to purchase the car at a set price. Dealers would still distribute the cars."
Nothing has been finalized yet, but there are a number of interesting questions: If GM is going to work with eBay to find the buyers, why do the dealers need to be involved in distributing the cars? Is this just protectionism at its lowest ebb, or are the dealerships really going to be adding significant value to the transaction? As I've written in the past on BloggingStocks, taxpayers should be deeply concerned that altruistic (or politically influenced) concern for the well-being of car dealers will undermine the turnaround of GM.
What does this "partnership" say about the future of GM? Probably nothing. Letting GM stick its cars on eBay costs eBay nothing -- the platform is already in place -- and has great upside potential if it goes well.
GM CEO Fritz Henderson's decision to hype the deal as an "innovative new partnership" is also indicative of just how hard he's spinning to win GM's battle for the hearts and minds of consumers.
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