Would you have thought differently if the story first appeared in the New York Post?

You would have to search long and hard to find two papers with a more different political bias than the New York Times and the Wall Street Journal. When both are reporting similar stories it is highly likely that there is indeed fire to go with the smoke.

American Leyland!”

Exactly!

Ford and GM would be a very hard merger to make happen, but somebody is going to pick up the pieces of Chrysler. They do not have the scale required to compete in today’s automotive marketplace.

How many cell phone makers of consequence are there?

How many computer makers matter of size are there?

How many appliance companies share the US market?

In nearly all industries a company which doesn’t have at least 30% or more market share is unlikely to be able to be profitable over the long term. General Electric has long had a strategy of getting out of any manufacturing business where it doesn’t have at least that kind of share. Unfortunately for GE, they were seduced by the easy money of playing banker and got into a game where they were but one of many … and that piece of the business is killing them right now.

Chrysler is simply too small to survive as it is. Piecemeal product sharing deals aren’t going to get it done for them either. Heck, even the ultimate niche automotive companies like Rolls-Royce and Ferrari had to become part of larger enterprises to survive.

The wrong lessons have been learned from the Daimler-Chrysler disaster. The lesson should be the importance of doing acquisitions right, but people seem to think that the lesson was “mergers don’t work.” Daimler screwed up in myriad ways, starting with the absurd fiction that they were doing a merger of equals.

Things are going to happen.

I think Ingvar has it right, they are working with eachother on how to divide and grow the corporate wellfare.

Apparently the Kiebler Elves just could not see enough upside to the deal and talks were called off.

There are far more global automotive suppliers than the market can support. More mergers and/or outright closings are going to happen.

Ford will not merge with GM. What does GM have that Ford does not? Two mode hybrid, perhaps…but that doesn’t sell. Also, the Ford family would have to give up control. Fat chance. And GM is bleeding cash like a hemophiliac in an iron maiden…

We need two or more companies able to compete with each other so we see cars made with different philosphies.

I’m not worried about Chrysler merging with GM cause they have nothing on the table right now. But FORD must stay right where it is and GM must too.