• Mar 18, 2006
Among auto enthusiasts, one way to pass the time is imagining what would happen if Toyota purchased General Motors. The mind of Bloomberg columnist Doron Levin must wander a lot as he imagines a scenario in which Honda also acquires Ford. In the mind's eye of his postapocalyptic world (or is it?),  ‘ToyotaGM’ would instantly become the #1 automaker in the world. Hope would return to domestic-dependent areas like Flint, Michigan. Productivity would increase and both Toyota and Honda would be enshrined in American hearts for saving a pair of American institutions.

And then Levin douses himself with the cold facts of reality.

He points out what is common knowledge to many auto and financial insiders: GM and Ford are ‘poison pills’ with the following effects:
  • Healthcare and retirement obligations
  • One-sided contracts with the domestic unions
  • Management culture.
More details can be found at the link. Is Levin on the mark here or is the possibility of Japanese giants saving the day at the 11th hour a real possibility?

[Source: Bloomberg]


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  • 17 Comments
      • 8 Years Ago
      Reminds me of these old rumour from last October about...Renault being interested to GM! Here the links if you like to read http://www.gminsidenews.com/forums/showthread.php?t=20784
      http://www.autoblog.com/2005/11/20/carlos-ghosn-to-head-up-gm/
      • 8 Years Ago
      #14 Yes it's true GM did fall off the wagon and toyota does have a market cap more than ten times that of GM. The reason GM lost so much money last year is because they thought they were the king of the hill and there wouldn't be anyone to take their spot. Well now that reality has struck they are turning it around this year. Just look at the sales of their new suvs and the upcoming vehicles from Buick and Saturn. Last year chevrolet was the most sold brand in the U.S. Pontiac is being turned around and Cadillac has already beeen turned around. I believe their problems would be Hummer and Saab. And besides I confess that toyota vehicles are very good quality but believe you me I will neve buy a foreign made vehicle because I'm 100 percent American goddammit!!!
      JOE
      • 8 Years Ago
      You all forget one thing about Toyota and GM. You, me and anyone else in this country can buy GM stock. NONE of us can buy a single share of Toyota. GM could never take over GM and you can never 'own' a piece of Toyota since you can NOT purchase any stock. PS you can invest in a 'certificate' but not stock or have a voting right.
      • 8 Years Ago
      #6 Richard Warren plze stop spreading your juvenile fantasies on autoblog, its almost embarassing. GM could leverage all its assets and Kerkoran can use all his billions and its still wont be enough to take control of Toyota. Lets see Toyota has a market cap of 176bn (check Yahoo), GM about 12bn. Lets see what else, oh yeah, Toyota made over 10bn last year while GM lost 10bn (actually could be more as the acct errors reported last friday make GM look like another Enron). Whatever cash on had that GM has on hand is just enough for GM to run its operations for another couple of years.
      • 8 Years Ago
      I wish people would keep their idiotic political perspectives out of an automotive blog. This country was ripe for an economic slide long before Bush took over. Remember the stock market bubble? You know, years of unrealistic easy money, resulting in years of unrealistic tax revenues? (Yes, the Clinton years). The frenzy has now been replaced by a housing speculation bubble, propping up consumer spending but not doing much for federal tax revenues. Either way, presidents don't kill our economy; our citizens do.

      Good grief Gundar, hyping the new Mustang as the greatest car in the known universe in one thread, then going on the clich餠anti-Bush tirade in another...what are you, a UAW operative? Your DNC talking points are entertaining, but may best be served on a political blog...

      GM hung itself when it bet the bank on the big SUV fad. They cashed in for years on our fashionable excess (with American consumers helping the Middle East despots by filling our Escalades with black gold every time we headed to Starbucks for a latte), but now it's time to pay the piper. I can't imagine a single thing GM has that Toyota would want.
      • 8 Years Ago
      #6...yeah, right.

      Look at the financial picture of the two companies. Toyota is managed much better than GM. Who would be stupid enough to loan GM the money it would need to buy Toyota? For that to happen, you'd have to have outside investors with nearly $90 billion to invest just to give GM majority control. There are people who have no good business sense, but they don't typically have that kind of money to lose.

      As others have said, if Toyota is interested in GM or its assets, they will just wait until the bankruptcy court proceedings and pick up the pieces that they want for pennies on the dollar...without the UAW, vendor or executive contracts. Those will get discarded by the courts.
      • 8 Years Ago
      Toyota is "the" Automotive corporation....now..
      Sony was the corporation.... until...Samsung for ex.
      Maytag was "the "corporation" ....until.... Whirlpool.


      Toyota has no liabilities, they started in 1946, so right at the start of the baby-boom. Eventually, they will have retirees, but they avoided the UAW trap, which is , in my view their main advantage. Their healthcare is supported by Japanese population, as it is the case with Korea.

      GM , Ford will limp through those difficult times, until 2007.

      Delphi is the test case, and we hear that a deal is possible. The entire industry will change in US. No matter what G.W. says, I don't see the day when they will replace the Government Suburbans and Yukons with Pilots and Sequoias.
      President will change, Hillary Clinton will get elected, which is what the Japanese corporations fear the most. Whatever they say, the number of US transplants they have is way far less than Ford GM and Chrysler.
      Don't bury them too fast.
      • 8 Years Ago
      Richard Warren is displaying some innovative thinking even if you don't agree with him.
      These are the type of ideas that should be bouncing around GM's boardroom everyday.
      • 8 Years Ago
      Ever since I read of the Toyota-GM deal to cooperate on advanced technology of some sort (hybrids?) about five years ago I've thought that GM's top management would like nothing better than to sell out the company to Toyota. The tough part is getting it to a place where Toyota would want to buy it.

      I also think it would be no less a sell out than when Eaton sold Chrysler to Daimler-Benz. The executives would earn big bucks and be able to retire thinking they'd done good in the world, but the organizations would become mere shadows of their former selves.

      Granted, Chrysler isn't in bad shape these days. But it was also in much better shape at the time of its acquisition than GM or Ford would be.
      • 8 Years Ago
      #6, you're wrong. Toyota has more cash, please put down the crack pipe lmao.
      • 8 Years Ago
      Well, it's always good to see folks stuck in the box looking over the side and ready to throw dirt on a grave VS thinking about ways to change the game.

      You can just hear the great teams before they go out on the field "it's gonna play out way bad and we'll lose" Right----

      And it's the viewpoint of not being able to change things that in the end will do the most damage.

      • 8 Years Ago
      Never happen, especially at Ford. People tend to forget that Ford is basically a family owned company with the Fords owning most of the voting shares of stock. Honda could buy every outstanding share but would never get a seat on the board because they wouldn't have enough votes.
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