GM, Ford discussed possible merger or alliance: report

[Trainman]

From: http://www.cbc.ca/story/money/national/2006/09/18/fordgm.html

Executives of General Motors Corp. and Ford Motor Co. have discussed a possible merger or alliance, the trade journal Automotive News reported Monday. Both companies declined to comment on the report.

Automotive News quoted what it said were several people familiar with the talks as saying that discussions involving senior executives began in July and are not taking place now.

The report comes as GM and Ford have been slashing their workforces and closing plants in efforts to reverse multibillion-dollar losses. Their sales have been hurt by competition from more fuel-efficient models from Asian automakers.

As the two biggest U.S. automakers, any deal would presumably face scrutiny by U.S. antitrust regulators.

In July, GM, Renault SA of France and Nissan Motor Co. of Japan announced a 90-day review of an alliance among them.

"As we've often said, GM officials routinely discuss issues of mutual interest with other automakers," GM spokesman Brian Akre said before business hours Monday. "As a policy, we do not confirm or comment publicly on those private discussions, which in many cases do not lead anywhere."

Ford's Oscar Suris, also speaking before business hours, said: "We're not commenting on speculation."

Talk of alliances involving GM came after GM shareholder Kirk Kerkorian, who owns a 9.9 per cent stake in the company, called for GM, Renault and Nissan to pursue an alliance.

Carlos Ghosn, the chief executive of Renault and Nissan, has said the benefits from an alliance would be similar to the gains from the Renault-Nissan alliance, which have included cost savings from joint purchases of auto parts.

Ford earlier declined to comment on an August Wall Street Journal report that then chief executive Bill Ford approached Ghosn about a Ford alliance with Renault and Nissan.

[ovr50]

Ford-GM would seem to be a very unlikely marriage, too much overlap of product, marketing, dealerships, etc, etc. I very seriously doubt this will ever happen (regardless of US anti-trust laws).

[Bullet Blue]

Agreed. Plus I don't think die hard GM enthusiasts and Ford enthusiasts would be too happy. 

[CSH]

From: http://www.cbc.ca/story/money/national/2006/09/18/fordgm.html

Executives of General Motors Corp. and Ford Motor Co. have discussed a possible merger or alliance, the trade journal Automotive News reported Monday.

Imagine the amount of losses the combined company will make..

[G0dspd]

GM-Nissan-Renault .... GM-Toyota ... Ford-bla bla bla  and now GM-Ford.     What's next?   

[Snowman]

I guess I should use proper titles on my threads:
http://www.canadiandriver.com/forum/index.php/topic,48166.0.html

[Trainman]

I guess I should use proper titles on my threads:
http://www.canadiandriver.com/forum/index.php/topic,48166.0.html

Ops, me bad         

[hondasalesguy]

If people think there is duplication and redundancy in the GM line, can you imagine if they threw all the Ford products into the mix? I think this is just desperation on the part of GM, seems to me that Ford at least has a chance of turning things around, their product line is leaner than it used to be with fewer turkeys left in the line. If Ford's pockets are deep enough they will probably come out of this dark tunnel in 5 years give or take, IMO.

[Snowman]

I agree, Ford is shedding excess capacity and staffing levels more quickly than GM. The union has even agreed that Ford can bring in cheaper replacement workers:


Ford can hire lower-paid temps
Under deal with UAW, company can use temporary factory workers at $18.50 an hour to replace buyouts.
Bryce G. Hoffman / The Detroit News

Ford Motor Co. will be able to replace workers who take advantage of one of the automaker's buyout offers with lower-paid temporary workers under an agreement negotiated with the United Auto Workers.
But the company expects to fill most vacancies with replacement workers from factories that were once part of Visteon Corp., Ford's former parts unit.
"We do have the right to hire temporary workers," Marty Mulloy, Ford's vice president of labor affairs, told The Detroit News. Mulloy said some specifics of the deal are still being hammered out with the union.
What is known is that Ford will be able to hire temporary workers at a starting wage of $18.50 an hour, with no benefits. The average Ford wage is $31.64 an hour. After 90 days, the temporary workers will be eligible for holiday pay. After about seven months, they will become eligible for health insurance and higher wages.
Ford is preparing to offer eight buyout packages to all of its 75,500 U.S. hourly workers in a bid to cut up to 30,000 factory jobs in North America. Workers must sign up by the end of November, but do not have to leave until Sept. 1, 2007.
Ford spokeswoman Marcey Evans said it is too early to tell how the use of temporary or transfer labor might affect Ford's quality and productivity.
Until Ford knows how many workers are leaving, and from which plants, it cannot effectively assess the challenges, she said.
The expanded union buyout program is part of Ford's accelerated restructuring plan, announced on Friday, which also aims to eliminate 14,000 white-collar jobs through buyouts and, if necessary, involuntary layoffs.
Ford, which lost $1.4 billion in the first half of the year, hopes to cut North American operating costs by $5 billion and become a smaller and leaner automaker that can better compete against foreign rivals.
Using temporary workers could be a significant cost-savings and could help boost Ford's standing with investors, who drove the company's stock price down 12 percent Friday on fears the revamped restructuring plan still doesn't cut deep enough.
"The Street will like that," said Bradley Rubin, an analyst with BNP Paribas in New York. "Obviously, you need someone to replace the people who are leaving and keep the lines running. Being able to give them low pay and no benefits is a plus financially."
Ford says it expects to use such labor on a limited basis.
"It really depends on the take-rate for the buyouts," said Ford's Evans. "Our first priority is to flow back employees from ACH."
ACH, or Automotive Components Holdings LLC, is the holding company set up by Ford last year to manage most of the former Visteon Corp. factories the automaker took back as part of a bailout deal with its former parts subsidiary.
ACH is charged with preparing those plants for eventual sale, but Ford said last week it will close any plant that doesn't have a buyer by the end of 2008.
Ford has yet to sell any of these facilities, and many of the workers at these plants are eager to get jobs at Ford plants.
"There are a lot of people at those factories who see this as their last opportunity to get into a Ford plant and earn $75,000 a year," said Sean McAlinden, chief economist with the Center for Automotive Research in Ann Arbor. "I don't think they're going to be hiring too many temporaries."
McAlinden said the deal between Ford and the UAW on temporary workers is almost identical to an agreement reached earlier this year between the UAW and General Motors Corp.
Of more than 34,000 GM workers who took buyouts, 24,000 have left the company, GM spokesman Dan Flores said Monday.
GM has hired several hundred temporary workers at various plants and also has been filling openings with employees from Delphi Corp., GM's former parts subsidiary, Flores said.
Delphi, which also offered buyouts to its hourly work force, has said it has hired more than 2,000 temporary workers.

[Gwendly]

Wow, $31.64 an hour? That's the more than the starting wage for a engineering manager within the goverment of manitoba makes to start with ($31.13/hr). No wonder the big three are having such problems

[gta_driver]

Its sad commentary on how desperate things have become (and are becoming) in Detroit when two companies which pile loss upon loss (despites GM's own spin and insistence that its turning things around) talk of an alliance or merger.

[Snowman]

Wow, $31.64 an hour? That's the more than the starting wage for a engineering manager within the goverment of manitoba makes to start with ($31.13/hr). No wonder the big three are having such problems

Fack…we can’t hire a Senior Designer for under $40/hr here in Sudbury.

[Trainman]

Wow, $31.64 an hour? That's the more than the starting wage for a engineering manager within the goverment of manitoba makes to start with ($31.13/hr). No wonder the big three are having such problems

Fack…we can’t hire a Senior Designer for under $40/hr here in Sudbury.

Go to AB, they can't get forestry consultants for less than $800/day.  And if you are in the gas field you can get over $1,000 per day.

So depends on where you are and your field of work.

But in BC sawmill workers start around $19.00 per hour and go up.

[nefcanuck]

Wow, $31.64 an hour? That's the more than the starting wage for a engineering manager within the goverment of manitoba makes to start with ($31.13/hr). No wonder the big three are having such problems

  Makes me not feel that guilty about my wages as an Ont. provincial government employee lemme tell ya

NefCanuck

[Snowman]

The good thing about overheated economies in other areas of Canada is that it elevates remuneration packages of the people who stay put. More companies in Northern Ontario are developing staff retention packages as it is more economic than recruitment. Our cost of living remains low but our wages go up. Keep up the good work boys and girls.