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Manufacturing News, Source : The Manufacturer US
Published : 04 Oct 2006 16:34
Ford/GM talks nothing out of the ordinary
The analyst community, and Ford and GM together, are downplaying the importance of Ford/GM talks.
An Automotive News story on talks between the auto giants sent ripples through the industry press. The talks purportedly began in July, with GM CFO Fritz Henderson and Ford CFO Don Leclair discussing an alliance into August, but both companies claim to have put an end to the talks since.
To put the talks in context, in July, both companies were preparing announcements on job cuts and plant closures. Ford was mulling cost cuts which would result in the loss of 30,000 factory jobs and 14 closed plants by 2012. Both Ford and GM were also in very tense talks with the United Auto Workers, with UAW President Ron Gettelfinger purportedly furious over treatment of auto workers, and placing blame for market losses directly with Big 3 executives. GM was aching from a net loss of $3.18 billion for Q2 2006, but were open to alliances: GM in July announced an "axis" with Chrysler and BMW to produce a new hybrid system for trucks and SUVs, and had just evaluated (and rejected) a similar alliance with Renault and Nissan.
Alliances and cop-production are certainly not unheard of among automakers, but rare among the Big 3. Both Henderson and Leclair downplayed the importance of these talks, telling the press that negotiations like these are constant among automakers. Instead the two companies are pursuing their individual rebuilding strategies, and forging ahead with other alliances and growth strategies (e.g., Ford purchasing BMW’s Rover brand).
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