Detroit News: BMW and Mercedes to Merge?
BMW and Mercedes have been rivals since 1929, but Detroit News columnist Christine Tierney reckons the two automakers are eyeing each other across the dance floor. Tierney points-out that Daimler-Benz (Mercedes to you and me) hooked-up with Chrysler to fend off the possibility of a hostile takeover. Now that the Chrysler divorce is going through, they're even more vulnerable than before. What's more, Tierney says the folks sheltering under the three-pointed star are "increasingly threatened" by Porsche's takeover of the VW Group. As Mercedes needs to off-load some of their R&D costs, and BMW CEO Norbert Reithofer just declared his intention to "wring out" $8b in savings to bolster his company's margins, and BMW is working with GM and Mercedes on hybrid powertrains… We reckon this Yenta's got a yen for mischief, and under-estimates the weight of history and the bad blood that flows between the Germans. Still, just ask Dr. Z; stranger things have happened.
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Profit margins at BMW and Mercedes have been falling the last few years. They both need to do something. This may well be it.
I think the German and EU antitrust regulators might have some problems with this. Don't hold your breath.
Either it's a slow news day or there a crackhouse under the Detroit News offices. There's no logic or synergy to uniting auto brands under one roof unless you start sharing platforms and buttons, very tricky to get right and death to a luxury brand. Development costs can be shared between companies by forming partnerships for individual projects. PSA are masters of this, BMW and MB are no slouches either. The alternative is corporate bloat and badge engineering. Look at the sad fate of SAAB inside the horrible maw of GM and shudder.
It ain't gonna happen. No way. German industry does not work like that. Anybody want to make this interesting? 100 Euros on no merger till 2015.