Monday, November 20, 2006

Big 3 automakers to become Big 2?

This is purely speculation on my part. I have no basis for arriving at the conclusion, other than that it would make a tasty story. Well, at least an interesting story.

With all the talk of Ford and GM in the dumps, is it possible that the two biggest American automakers might join forces (i.e., merge) to compete with their Japanese and European counterparts? The resulting company would be enormous. But there would be a lot to gain in terms of synergy, efficiency, and capital.

Much of the overlapping manufacturing capacity could be sold off to, guess who, the competition. Ford-GM would have much more bargaining clout when it comes to negotiation of contracts with the UAW. America's best and brightest managers could be recruited and/or retained to build a better car and brand. Many of the non-core businesses could be sold off. It looks like a win-win to me.