More Videos
- Obama's Emission Reduction Pledge Paints Future for Autos
- Toyota Makes Recall Fix And So Long Saab
- The L.A. Extravaganza: A Test for Auto Shows
- Volt Drive: Great Ride, Interesting Interior and a Friendly Chirp
- Volvo Talks Show New Day Dawning for China
- Starting Car2Go - Smart Move for Daimler
- GM Cuts Losses—Plans Early Loan Repayment
- Ghosn's Bet: 10% of World Will Drive EV's in 10 Years
- Ford, Hyundai, Audi Gaining Interest
- Cadillac Converj Smart Extension of Volt
MOST SHARED
- US Shoppers Spent Less Over Black Friday: NRF
- Tiger Woods Wants to Protect Family Privacy: Agent
- UAE Stocks Tumble on Dubai Woes; Asia Rebounds
- Dubai's Nakheel Seeks Suspension $5.25 Billion in Bonds
- South Korea Sees Exports Bouncing, but Risks Remain
- Japan Won't Intervene to Weaken Yen: Finance Minister
- Dubai is Harsh Reminder of Prolonged Global Recovery
- Banks With The Biggest Exposure to The UAE
- Tiger Woods Wants to Protect Family Privacy: Agent
- Portfolio Prep for Next Week: 'Don't Get Crazy'
- U.S. Stocks Fall on Dubai Worries
- Black Friday at Best Buy
- Strategists on Dubai: Avoid 'Rash Moves' Now
- Longer Lines, Fuller Carts This Black Friday
- Dubai Stock Market Fear Has 'Legs': Dennis Gartman
- Obama's Emission Reduction Pledge Paints Future for Autos
- Is Super Bowl Halftime Act Too Old?
- Regulators Compile Global List of 'Systemic Risk' Banks
- UAE Central Bank Stands by Banks Amid Dubai Crisis
- Dubai's Nakheel Seeks Suspension $5.25 Billion in Bonds
- US Shoppers Spent Less Over Black Friday: NRF
- US Senator Opposes Fed Chief Bernanke Renomination
- A Weak IPO Debut for Las Vegas Sands' Macau Unit
- US Treasury Wants Banks to Do More to Ease Mortgages
- Tiger Has Nothing More to Say to Police: Agent
- Danish Draft Urges 50% Global Emissions Cut by 2050
RSS FEED
Behind The Wheel
Text Size 
 |
The latest being BusinessWeek, which is reporting GM execs have talked about the idea of GM and Ford merging, but decided not to pursue because it would be a distraction to GM's turnaround.
While the report characterized the talk as "internal banter", the idea of GM[GM
Loading...
()
] buying Ford [F
Loading...
()
]is out there, and people are asking, would this move make sense?
Let me be clear about what a mis-guided and bad idea this would be. As a friend of mine said when I brought this up, "Two wrongs do not make a right." Right now, these guys are going in the wrong direction for similar reasons and there's little reason to believe a marriage would make things right. Why? Here are a few reasons.
Too many under-utilized truck and SUV plants in North America. These guys are already struggling to cut/convert these plants to build more cars and fuel efficient crossovers. Imagine trying to do that on an even larger scale.
 |
Duplicate product line-ups. From sedans to SUVs to pick-ups, these guys mirror each other. GM already has too many brands in my opinion. Adding Ford, Lincoln, Mercury and Volvo would make matters worse. Then there's the inclusion of thousands of Ford dealers. GM needs way fewer dealers and brands, not more.
Ford brings little to GM's international growth. They are strong in the same markets: Europe, Latin America, and Australia. And while Ford is a little further along than GM in the high growth markets of India and Russia, it's not like Ford would bring a treasure trove of potential profits to GM on the international side.
Too much debt. Ford's already way in hock and GM is headed that way as it burns through cash and tries to re-tool it's plants. Put these two together and you have even more debt that would weigh down A joint company.
Sure it's tantalizing to think that GM and Ford together would have roughly 33-35% market share in the U.S. And would easily be #1 in the world, well ahead of Toyota[TM
Loading...
()
]. Plus there are so many iconic brand names between the two companies, Rick Wagoner would oversee a portfolio of the most brands with the most brand awareness around the world.
But the reality is that these guy are better off apart. Rick Wagoner knows that. Alan Mulally at Ford knows that. Now it's time all of us know that as well.
Questions? Comments?
Data is a real-time snapshot *Data is delayed at least 15 minutes