Ford, GM have discussed merger, alliance

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9/18/06

(Reuters) Senior executives at General Motors Corp. and Ford Motor Co. = have discussed a merger or alliance, industry newspaper Automotive News = reported on Monday.

Citing several sources familiar with the talks, the paper said it was = not clear whether the negotiations will bear fruit.

As of now, the two companies, both struggling with shrinking market = shares while restructuring operations, are not holding talks, and one = source said there is a slim chance that anything will come of the = situation, Automotive News said.

GM and Ford declined to confirm any talks.

"As we've often said, GM officials routinely discuss issues of mutual = interest with other automakers," GM spokesman Brian Akre said. "As a = policy, we do not confirm or comment publicly on those private = discussions, which in many cases never lead anywhere."

Ford spokesman Tom Hoyt said the automaker does not comment on = speculation.

On Friday, Ford said it would slash $5 billion in costs and one-third of = its work force as it warned its auto business would not make a profit in = North America for another three years. It also suspended its dividend = and pledged to revamp a vehicle line-up seen as weak by analysts.

However, the No. 2 U.S. automaker ruled out an immediate sale of its = Jaguar brand, disappointing investors who wanted Ford to press ahead = with asset sales to raise cash, sending shares to their biggest = single-day percentage decline in almost four years.

Earlier this month, Ford named Alan Mulally, a former Boeing Co. = executive, as chief executive, ending the troubled five-year stint of = Bill Ford Jr. as the company's operational head.

GM is in the midst of its own restructuring as it tries to recover from = a $10.6 billion loss in 2005.

Turnaround efforts at the world's largest automaker have gained traction = this year as 34,400 workers

Reply to
Grover C. McCoury III
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Grover.. long time, no see.

But you should know better than post in HTML... or did you forget to set your OE 6 params to text only for Newsgroups?

I can see an alliance between GM and Ford, but I have to look and raise an eyebrow over doing so with a company that would partner with Renault/Peugeot as the result of that is two companies with quality-image problems. Same to some extent with Nissan... for two decades we been hearing that Nissan is NOW building better cars.. but after ten years, the image still doesnt hold.

Reply to
Backyard Mechanic

i agree. I just cannot see this merger resulting in a better quality product anytime soon. maybe it would be good at helping the 2 entities shave payroll and benefits obligations. that could help them in the long term. regardless, both companies are 10 years away from producing a product that can compete with Toyota's cars. dont get me wrong, i like the mustang and the F150, but when you compare fleets... IMO there isnt much to compare. i wish them both luck. Harry in Montreal

had

93 5.0 LX 96 GT 98 Z28 01 GT conv.

now

03 rav, wife and dog.
Reply to
Harry in Montreal

I cannot see it happening as if it does it is a sign of the end coming for Detriot as we know it and even auto making up there completely. Detriot has no one to blame for market sure problems except themselves.

----------------- TheSnoMan.com

Reply to
SnoMan

A Ford and GM merger may actually create a black hole of suckage that no car model can escape.

I don't think any good product could get out the door with two sets of executives and management preventing it.

Reply to
Brent P

Brent - does this mean we agree on something? after many minutes of trying to defend CR, i gave up. i am just glad that we both agree these companies are screwed. Harry in montreal

Reply to
Harry in Montreal

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I dont claim to know anything about business, but how does merging 2 = failing companys make 1 good one?

(Reuters) Senior executives at General Motors Corp. and Ford Motor Co. = have discussed a merger or alliance, industry newspaper Automotive News = reported on Monday.

Citing several sources familiar with the talks, the paper said it was = not clear whether the negotiations will bear fruit.

As of now, the two companies, both struggling with shrinking market = shares while restructuring operations, are not holding talks, and one = source said there is a slim chance that anything will come of the = situation, Automotive News said.

GM and Ford declined to confirm any talks.

"As we've often said, GM officials routinely discuss issues of mutual = interest with other automakers," GM spokesman Brian Akre said. "As a = policy, we do not confirm or comment publicly on those private = discussions, which in many cases never lead anywhere."

Ford spokesman Tom Hoyt said the automaker does not comment on = speculation.

On Friday, Ford said it would slash $5 billion in costs and one-third = of its work force as it warned its auto business would not make a profit = in North America for another three years. It also suspended its dividend = and pledged to revamp a vehicle line-up seen as weak by analysts.

However, the No. 2 U.S. automaker ruled out an immediate sale of its = Jaguar brand, disappointing investors who wanted Ford to press ahead = with asset sales to raise cash, sending shares to their biggest = single-day percentage decline in almost four years.

Earlier this month, Ford named Alan Mulally, a former Boeing Co. = executive, as chief executive, ending the troubled five-year stint of = Bill Ford Jr. as the company's operational head.

GM is in the midst of its own restructuring as it tries to recover = from a $10.6 billion loss in 2005.

Turnaround efforts at the world's largest automaker have gained = traction this year as 34,400 workers

Reply to
petebert

reanult is like a corporate raider, it sucks the life out of what ever it touchs and then dumps whats left, Mack Trucks come to mind real fast, they ran it into the ground, and then sold what was left to Volvo. Macks original problem was they built to damn good a truck, they lasted too long, I see '69 to '79 Mack R-models on the road in vast numbers every day. I still see a good number of B series Macks making a living, that pretty damn good considering the B series was discontinued in 1966

Bullshit, sorry sno but I don't buy the "its entirely their fault they are where they are" claims. The American public has been feed a steady line of how great the japs are, and how lousy the American iron is, and they have swallowed that line hook, sinker, bobber, line, rod, and reel right up to the caster's shoulder. What amazes me is how Ford can have a problem with engine fires and its on every news show and paper front page, but Toyota can have the same issue and its all very hush hush. Toyota V-6 has an engine design problem , but the owner is being blamed for improper service even when he's had all the service done at the toyota dealership. Honda has been having problems with rear lower control arm failures for over five years now across their entire car line, but it doesn't make the news. Toyota has been having problems with rear hub bearings failing, but it doesn't make the news, Mitsubishi cant make a V-6 that doesn't burn oil after 50,000 miles, but people keep buying them. Mitsubishi's CEO had to step down because the Japanese government was going after him for covering up safety defects , like their medium duty trucks front axles snapping the spindle off (Think of that every time you see a FUSO in the rear view mirror) I did some digging a while back while I still had access to recalls and service bulletins. In 2004 the Toyota Camry had more service bulletins and recalls than the Ford Focus.

Look at designs, GMs Avalanche and Fords Sport Trac get hammered for being ugly as sin( and rightly so IMO), and as useful as a bailing bucket with a hole in it on a sinking boat, yet Honda Ridgeline gets rave reviews for design and usefulness. GM ie Buick came out with the Aztec and it got ripped, but Toyota and Honda both copied the look and its god the greatest thing since sliced bread. And those refrigerator boxes on wheels the Honda Element and its butt ugly step sister the Scoin xB from Toyota?

Whitelightning

Reply to
Whitelightning

We are already seeing Detroit as we know it. Ford is getting rid of as many workers as they can.

GM already did the same thing. Diamler-Chrysler is owned by a German company.

All three are in deep doo-doo.

The people who make parts for GM, D-C and Ford are also in deep poop.

Automaking had also changed drastically. The foreign brands already employ hundreds of thousands of people directly and indirectly.

With the price of gas so high, the big 2 + D-C also have major problems, because so many of their vehicles are trucks and their cars don't make much money.

Detroit as we know it had changed already and will change again.

Jeff

Reply to
Jeff

Detriots biggest problem is labor costs. Approx 70% of the price of build a car at GM is for labor costs, not raw materials with health insurance along adding 1500 bucks to the average car price. If they cannot rein this in, they will fail because seeking cheaper part to ofset high labor costs is resulting on a lower quality product. They are getting into a big pickle and there is a showdown on the horizon between Detriot and Labor unions. Either the union will have to give in or they will go out of bussiness, no middle of the road possible. This will come to a head in next 3 or 4 years tops.

----------------- TheSnoMan.com

Reply to
SnoMan

That's health care and pension costs.

Or overpriced product.

There's always bankrupcy court. Ask Northwest Airlines and the other airlines.

Jeff

Reply to
Jeff

The idea is to sell enough cars to turn enough profit not to have to worry about. I am curious just how much do you think the average auto worker makes working for FoMoCo, or General Motors once he/she is tenured. base salary before over time, remember the assembly line workers are hourly, and I'll let you in a clue, My wifes fater was 40 years GM, both her grandfathers, numerous uncles and aunts, and I have a few in my family that have worked for GM, .so no wild ass guesses or alligations of astronomical wealth please.

Whitelightning

Reply to
Whitelightning

$60k plus a pension with health care after retiring

Reply to
Jeff

grandfathers,

Reply to
razz

No just health care costs alone...

That will not sell and they will be out of bussiness

Yes and they got wage reducitons too. The gravy train ride is over but labor does not see it that way. The writing has been on the wall for some time now.

----------------- TheSnoMan.com

Reply to
SnoMan

Yes me and my wife pay for a good part of our health insurance. UAW workers do not know the hidden raise that they get every year just because they do not pay for health insurance costs to speak of. They are getting a big raise these days just to get the same wage and same health care coverage as health insurance costs are skyrocketing but since they do not pay it they do not realize that some years there 3 or 4% raise may in fact be 10 or 15%. Time to pay the piper. It is coming. Time to trim the fat.

----------------- TheSnoMan.com

Reply to
SnoMan

"razz" snipped-for-privacy@mts.net wrote in message news:MUEPg.7273$ snipped-for-privacy@newsfe16.lga...

I am going to get ragged here but I don't care lol. I've owned a lot of cars and trucks, fords, Chevy's, Pontiacs, 2 dodges. Owned 2 Smicas while in Germany and a few VWs, got down on my luck in 84 and was given a datsun

510 sedan (the absolute worse car I have ever owned) I always take care of what I own, I have driven many, make that most of them hard, but never put them away wet if you know what I mean. The car I have the fondest memories of is the one I tried my damnedest to kill, and it wouldn't die. The absolute worst car ford built according to many, a 1973 Ford Pinto Wagon with the 2.0 liter engine, bought used to be a beater, back and forth to work, fishing, go to the junk yard beast of burden. I learned a lot in that car, like you have to shift the automatic into second gear before you hit 43 mph or the pressure relief valve in the front pump opened and you had to wait for the RPM to drop before it would re-engage. If you just tapped the shifter into second at 41 mph and kept your foot on the floor, it would pull the right front tire off the ground. I learned how to change a timing belt in 28 minutes with hand tools. If you advanced the cam one tooth, it was a bit doggy off the line but at about 1800 rpm it would feel like a giant kicked it in the ass. Buy my third year driving it, two more of the guys at work had bought similar, because they figured if I couldn't kill it, it was a good ride for them. There were times I would leave the parking lot from work so hard the tip of the 102" stainless steel whip antenna mounted to the back bumper, with no spring mind you, would almost hit the pavement. The few guys that drove jap used to rag on American iron bad, but they never took me up on my offer, I would give them my Pinto for two weeks to drive as if they were in their Toyota or Honda, and I would driver their car like I drove the Pinto. No one ever took me up on that offer. At 265,000 miles I retired it. The motor was still running pretty good, we were on the second set of headers, and second carb. It had a roof rack that the previous owner had packed bondo around the mounts to stop the leak, all that did is speed the rot. I literally just pulled it off, sanded it down(the roof) patched the holes with aluminum duct tape, a layer of fiberglass and then a couple cans of rustoleum white paint lol. It slowed it down but the rust was already spreading bad, car was 12 years old when I got it, but only had 80,000 on the odometer. It never let me down but one time, and that was a dead battery. If the rust hadn't got to the floor boards, (mind you there was no carpet in this thing lol) I had envisioned cutting the roof off, narrowing a tailgate and wielding it in behind the seats, and then cutting a second gate down to build a Pinchero, ditch the auto for a five speed and rebuild the 2.0, cam it and four barrel, or two Weber side draft DCOE 45mm carbs.

Whitelightning

Reply to
Whitelightning

Tenured worker, that's a vested worker with 8-12 years on the job, working the 3-11 shift makes $50,000 a year. The 7-3 shift slightly less, the 11-7 shift slightly more. Over-time can raise that amount significantly, but then over-time can raise anyone's wages significantly. My wife's father's pension was $20,000 a year, plus medical when he passed away in 89. And at that time the amount dropped almost in half for my mother in law. From the time I met my wife in 77 till he passed away they owned 3 cars. When I met her they had a 74 Impala. When he passed away they had an 87 S-10 Blazer. They lived in a modest 3 bedroom house in Fenton, and then sold that and bought a small 2 bedroom 6 year old mobile home in central Florida. Most of her family is similar, and my family on my fathers side that worked for GM the same. That's why I always get such a laugh when I read about these wages. Yeah they got pension, and they got medical, and yes medical amounts to a lot these days, but instead of screaming about them having it, why aren't we screaming about the outrageous cost of health care? I kick myself in the ass daily for many things, like why didn't I stay in the service, I would have retired with 20 years some time ago, or why didn't I seek out a job with GM when I got out of the service, I would have had more than enough people pulling for me if I had approached any of my in laws. The real kick is the top 10% in the company make more then the rest of the workforce combined.

Toyota recently opened a new plant in Tenn. They got Tenn. to almost give them the land, they got major major tax breaks, they got Tenn. to build a mini plant next door for a training facility, Tenn. pays prospective employee's wages while they are in training, and Tenn. pays the "instructors" wages. What a sweat heart deal. And they hammered the same basic deal for the new plant going in Texas, and Canada is about to give the same and more.. If GM or Ford tried that everyone and their second cousin would be lined up to sue them. Starting pay at the Tenn. plant is $16 an hour, $3 less than GM or Ford, but Toyota and Honda are like Wal-mart they pick depressed areas in right to work/work at will states to build their plants and then demand major tax concessions to boot. Health care costs for the employee are high, and there is no pension plan at all. 401K and stock plans your on your own. But to the workers there it beats wal-mart or McDonalds, never mind that in the long run they are cutting their own throats.

I really do believe most people are quite naive about what we are up against. They can not fathom a person with an MBA from a major university being happy to work for $350 a month, live with his wife educated the same and making the same, two kids and usually at least one parent in a 560 square foot apartment that only has running water for 2 hours in the morning and 2 hours in the evening. Read Thomas L Friedman's book "The World is Flat" its a real eye opener. It got my dad to cut up his Sams Club card Whets going to happen when China starts importing a car selling for under $5,000? Its going to be a piece of junk, and its going to sell like hot cakes.

Whitelightning

Reply to
Whitelightning

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