Monday, September 18, 2006

GM-Ford merger? Don't laugh, it could happen

When things went from bad to worse at Chrysler about 25 years ago, even with loan guarantees from the US government, Lee Iacocca was so desperate that he proposed a merger with his former employer, Ford. It was actually a common-sense proposal to create a company that could rival GM or Toyota; combining Chrysler's engineering prowess with Ford's competitive environment The idea was Chrysler and Dodge would remain, but they would produce upscale versions of the K-Car for Ford and Mercury -- in return, Ford would make upmarket versions of the Ram truck to replace the F-Series. Ford basically said no, that they "weren't that stupid." The real reason, as some suspected at the time, was the grandson of Henry Ford absolutely despised Iacocca and didn't want to see his face.

It could have worked. It never got the chance.

Here's 2006. Chrysler is now owned by Daimler, and both GM and Ford are in junk bond status. What's being proposed? A GM-Ford merger.

We need that combination like a shot in the head. A company that has fifty percent of the market -- like The General once had -- is by its very nature uncompetitive. When Chrysler applied for loan guarantees in 1979 to stave off bankruptcy, its competitors' head offices were opposed but their respective dealer networks actually supported Iacocca, pointing out competition meant better products across the board and lower prices.

Regulators in the US might be stupid enough to fall for this scam. Even our Competition Bureau in Canada might be stupid too. The European Union, however, will never accept it -- especially if it means threatening home grown companies like Renault and Volkswagen.

Hey guys, if you want people to buy your cars, then make cars people want to buy. It's little wonder the Japanese automakers are killing you. Merging operations will mean diddly squat if you continue to come out with the kind of crap that distinguished you during the 1990s.

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Meaningless Meanderings19/09/2006 9:57:17 AM

Could happen ? It will happen because Ford and GM have little or no other choice. Even between the two of them they can't build a decent automobile, and their market share is destined to erode ever further until there are eventually two, or at best three major carmakers left. Decades of public abuse by building substandard products, then selling replacement parts for their inferior merchandise has finally caught up to the big two, and almost to the third of the big three. The solution? Fire all the existing design staff and management, and replace them with Japanese workers. Scrap the existing plants and replace them. Who knows .. in maybe a decade GM/Ford could turn a profit!

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