General Motors Corp's talks with Renault SA and Nissan Motor Co on a possible alliance -- and reports Ford Motor Co may be pursuing a megadeal, too -- show how automakers constantly turn to each other even amid fierce industry competition.
GM and Ford declined to comment on Monday on an Automotive News story that their top executives had discussed a merger or alliance.
Ford also declined comment on last month's Wall Street Journal report that Ford proposed its own deal with Renault and Nissan.
In July, GM, Renault of France and Nissan of Japan announced a 90-day review of a possible alliance among them.
Auto executives talk frequently about "what-if scenarios" and possible deals large and small, said David Cole, chairman of the Center for Automotive Research in Ann Arbor, Michigan.
"These kind of discussions go on all the time," Cole said. "Collaborating ... is part of how they're doing things."
These talks have yielded a growing number of joint efforts on everything from hybrid vehicles to better automatic transmissions, he said.
GM and Ford have been slashing their work forces and closing plants in efforts to reverse multibillion-dollar losses in the face of tough competition from Asia-based automakers.
On Friday, Ford announced deeper job cuts as part of its "Way Forward" restructuring plan.
GM lost US$2.9 billion, or US$5.19 per share in the first half of this year, while Ford lost US$1.3 billion, or US$0.70 a share.
Both companies declined to comment on the Automotive News story that quoted several unidentified people who said senior GM and Ford executives had begun talks in July but that the talks are not taking place now.
"My job is to keep everybody focused on our Way Forward plan and accelerating our results," Mark Fields, Ford's president of the Americas, said on Monday. "If we discussed all the speculation that was out there, I think we'd probably spend a couple of days."
GM spokesman Brian Akre said company officials "routinely discuss issues of mutual interest with other automakers." He said such talks are private and "in many cases do not lead anywhere."
Cole said an outright GM-Ford merger is unlikely and said that the firms carefully weigh antitrust issues during the lower-level cooperation that now takes place on such issues as hybrid vehicles, production technology and components.
"It would surprise me if there were a coming-together on the grand level," said Cole, but said Ford and GM very well could start more joint efforts similar to their current work to develop a six-speed automatic transmission
Even if GM and Ford don't merge, some other automakers will as the industry further consolidates, Cole said.
Ford's chronic labor cost problems and its shortage of interesting models give GM little reason to seek a close alignment, said analyst Charles Fleetham of Project Innovations in Farmington Hills.
"I don't see it from a business standpoint," he said. "They have the same high health costs, high union costs, ineffective white collar work force that they want to get rid of."
TYPHOON: The storm’s path indicates a high possibility of Krathon making landfall in Pingtung County, depending on when the storm turns north, the CWA said Typhoon Krathon is strengthening and is more likely to make landfall in Taiwan, the Central Weather Administration (CWA) said in a forecast released yesterday afternoon. As of 2pm yesterday, the CWA’s updated sea warning for Krathon showed that the storm was about 430km southeast of Oluanpi (鵝鑾鼻), Taiwan’s southernmost point. It was moving in west-northwest at 9kph, with maximum sustained winds of 119kph and gusts of up to 155kph, CWA data showed. Krathon is expected to move further west before turning north tomorrow, CWA forecaster Wu Wan-hua (伍婉華) said. The CWA’s latest forecast and other countries’ projections of the storm’s path indicate a higher
SLOW-MOVING STORM: The typhoon has started moving north, but at a very slow pace, adding uncertainty to the extent of its impact on the nation Work and classes have been canceled across the nation today because of Typhoon Krathon, with residents in the south advised to brace for winds that could reach force 17 on the Beaufort scale as the Central Weather Administration (CWA) forecast that the storm would make landfall there. Force 17 wind with speeds of 56.1 to 61.2 meters per second, the highest number on the Beaufort scale, rarely occur and could cause serious damage. Krathon could be the second typhoon to land in southwestern Taiwan, following typhoon Elsie in 1996, CWA records showed. As of 8pm yesterday, the typhoon’s center was 180km
TYPHOON DAY: Taitung, Pingtung, Tainan, Chiayi, Hualien and Kaohsiung canceled work and classes today. The storm is to start moving north this afternoon The outer rim of Typhoon Krathon made landfall in Taitung County and the Hengchun Peninsula (恆春半島) at about noon yesterday, the Central Weather Administration (CWA) said, adding that the eye of the storm was expected to hit land tomorrow. The CWA at 2:30pm yesterday issued a land alert for Krathon after issuing a sea alert on Sunday. It also expanded the scope of the sea alert to include waters north of Taiwan Strait, in addition to its south, from the Bashi Channel to the Pratas Islands (Dongsha Islands, 東沙群島). As of 6pm yesterday, the typhoon’s center was 160km south of
STILL DANGEROUS: The typhoon was expected to weaken, but it would still maintain its structure, with high winds and heavy rain, the weather agency said One person had died amid heavy winds and rain brought by Typhoon Krathon, while 70 were injured and two people were unaccounted for, the Central Emergency Operation Center said yesterday, while work and classes have been canceled nationwide today for the second day. The Hualien County Fire Department said that a man in his 70s had fallen to his death at about 11am on Tuesday while trimming a tree at his home in Shoufeng Township (壽豐). Meanwhile, the Yunlin County Fire Department received a report of a person falling into the sea at about 1pm on Tuesday, but had to suspend search-and-rescue
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