GM may merge with Chrysler. Where does that leave Ford?

If the merger occurs, what does Ford have to do in order to survive? Will it sell to an oversees automaker or merge with Toyota?

http://www.nytimes.com/2008/10/11/business/11auto.html?exprod=myyahoo

Not too many years ago a GM/Chrysler merger would have been unthinkable and would have been stopped as monopolistic. Today its a matter of survival. How times have changed.

In third place behind Toyota & the new GM?

No, wait, in second place behind Toyota? It’s not like Ford is seeking a merger. I don’t think it’s in the desperate straits that are Chrysler & GM’s current reality.

Make good cars.

Or just import good cars made in Korea, Japan, & Europe. Pay some fee to slap a Ford logo on 'em, 'cos Og knows Yankees can’t design aught but gas-guzzling tanks meant for a lost era of cheap oil.

I think big cars might be coming back. People need someplace to live.

I could see all 3 (GM, Ford, Chrysler) merging to survive. I don’t think that the government would have nearly the hard time with that as the Ford family would, though.

There was a long program on the future of GM last night. They are tossing everything onto the back of the Volt. It will cost about 40 thousand dollars. That is way too much. It will fail and GM will probably fail too.
Chrysler has a history of innovation and they would help GM. But 'if they merged GM would stifle them under their heavy overbearing management.
Ford may be the only one left.

I’m wondering if this merger would be good for Chrysler - It seemed the buyout of Chrysler by Daimler a decade ago seemed to sap energy and resources from Chrysler, as oppose to invigorating it.

The merger would be good for GM right now in that they could unload GMAC Financial Services (or more importantly GMAC Mortgage). It would be good for Cerberus right now because they do not really know how to run an automobile manufacturer, but seem to have success with financial services.

Once the dust settles on the deal, it will likely be horrible for GM because they are already overburdened with manufacturing capacity and this will just make it worse. Once the financial dust settles, GM will realize that there were a good many times that they only thing that kept them afloat was GMAC income. Back in the early 1990’s, a disproportionate amount of GM’s income was due to GMAC. Without that, they would have been really hurting.

If the financial markets do not turn around, Cerberus will be caught in a death spiral with GMAC leading them right down the tubes.

I heard radio news today that Ford was thinkng of getting rid of Mazda. Probably a mistake. I’d buy a Mazda but never another (11th) Frod.

If GM buys Chrysler, the net effect will be the same as when Chrysler bought AMC back in 1987. GM will end up with Jeep and the rest of Chrysler will disappear within a few years.

The “new” GM would be stuck with excess manufacturing capacity, excess employees and the obligation to continue to provide parts and service for the remaining former-Chrysler products as long as they stay on the road.

Or they could just drag out the negotiations so that no other savior for Chrysler/Cerberus comes forward, let Chrysler go bankrupt and pick up whatever assets they actually want during the bankruptcy proceedings.

In posting the question I sort of agree with ASAKMOTSD and kunilou. What would they do with the additional manufacturing capacity? While both companies have made huge design and product development mistakes they both have some high tech design capability. There doesn’t seem to be much synergy between two companies that have the ability to design vehicles but can’t get their quality and efficiency straightened out to the point of scaring their competition. Both of them have the same UAW burden so where does a merger get them?

I’m not pretending to have other than casual knowledge of the auto industry but it almost looks to me like the Ford stock is such a bargain that a cash rich company like Toyota might make a play for it. The Ford family has to realize that their net worth has decreased so dramatically in recent years that calling it a day might be the best option. It would sure beat bankruptcy, which has been an undertone for several years. The Fords could do a stock swap and secure their family into the foreseeable future.

I’m just thinking out loud but that’s the reason the question is posted on GD.

It certainly drained Daimler of a ton of money, talent and energy.

GM and Ford actually discussed a tie-up before GM turned to Chrysler, it turns out. So Ford apparently thinks it can survive on its own. While both GM and Ford are obviously struggling, I think Ford is considered to be in a more secure financial position.

I don’t quite understand the logic. What exactly does Chrystler have that GM wants? It seems like these ridiculous Microsoft / Yahoo talks. I was never quite sure what the benefit of that was. During the past 10 years it seems as if there have been several poorly-concieved mergers. AOL Time Warner, anyone?

The Jeep brand and the Minivan Market share(particularly as SUVs are seen as gas guzzling), and are pretty valuable. They rest of it is just more crap they’ll dump.

The only way I could see it making sense is if GM takes on board Jeep and the few other desireable bits, leaving Chrysler gutted, loads the remains up with all the stuff that is killling GM (worthless old brands, surplus factories, 75% of their employees etc.) and then spins the lot off as Liability Inc and leave it to go down the toilet. I’m not sure there is a legal way of doing that, but it would turn two struggling companies into one decent company and one dead one - at the cost of fucking over hundreds of thousands of employees and customers.

Do Ford have some really hot blackmail material on Toyota’s senior managers? Because I can’t see any other way they would be able to make this work. Toyota wouldn’t take over Ford for all the tea in china, served in a platinum teacup the size of the Indianapolis Speedway, with a cherry on the top.

Remember, Ford is not just a bunch of Crown Vic’s and Mustangs. They have heavy trucks and a very formidable international presence. Toyota has sold technology to Ford so they are not strangers. Toyota has the cash that Ford needs to reposition and expand in the US market. I could see the merger working quite well on a global basis. Again, with the fact that Ford stock is so cheap, it seems like a good time to make a grab especially if you want to stay ahead of a GM/Chrysler merger. Ford may sell their piece of Mazda which may just be a preliminary step in a larger merger.

GM is reactionary. They wait for trends to be established and then try to catch up. Chrysler has the Jeep, had the Viper, Prowler and made the first mini van, the cheap convertible ,the Lebaron. etc.
http://www.allpar.com/corporate/technology.html Plus these kinds on innovations. I wonder what GM brings.

But…what about *two *cherries?