Should the Big Two become the Big One?
The Big One -- that's an interesting thought. The Wall Street Journal has subscribed to the idea that two wrongs make a right, urging General Motors and Ford Motor Company to go in on it together to hopefully come out stronger in the end. The two would enjoy a 40 percent market share in North America and be able to better attack legacy costs (no doubt due to a much more powerful position in relation to the United Auto Workers), but the problems may outweigh the benefits -- dealerships will close, union members will strike, F-150-owning Silverado-bashers will suffer from irreconcilable identity crises, hell will freeze over and pigs will fly.
So, what do you all think? Is it time to roll out the Big One, or are the folks at The Wall Street Journal on crack?
[Source: The Wall Street Journal, via WDIV-TV]
Reader Comments (Page 1 of 3)
lammasu 10:02AM (7/18/2006)
My vote...crack.
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Juan 10:06AM (7/18/2006)
It's an interesting thought. It would have to be a slow and gentle transition, though. The duplication between product lines would have to be taken care of, but hopefully over the course of a decade or so and not immediately.
On the plus side, junk brands like Mercury might finally disappear.
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Steve S 10:07AM (7/18/2006)
So lets take two slow and fairly unispired companies and make one huge one slow and uninspired company. Sounds like a great idea.
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Joe Condon 10:18AM (7/18/2006)
I vote on crack. GM has enough products already competing with themselves. How would you differentiate Ford from Chevy? Buick from Mercury? etc.
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Matt 10:18AM (7/18/2006)
BWAAAAAAA HAAAA HAAAAA HAAAAA HAAAAA HAAAAA!!!!!!!
You guys crack me up!
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Michael Karesh 10:22AM (7/18/2006)
They're on crack.
First off, there's total duplication of markets and product lines. The consumer would most definitely not be well-served. For good reason, the DoJ would never allow it.
Second, the Ford family would have to give up control, as their power within a merged entity would be greatly reduced. Because of how their shares are structured, Ford would have to buy GM.
Neither company has problems that are not best solved by running itself the right way. A merged entity would be even more difficult to manage, making this task even more difficult.
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doug delano 10:24AM (7/18/2006)
Look, if GM had a realistic Board and Management, they'd simply take the Bankrupt Bullet and shed their absurd union and legacy costs. The amount of money they've been wasting on attempting to keep their heads above water is just ludicrous..This is not smart business. Spend that money, once they're in chapter 11, explaining to the public just how much stronger they'll emerge from bankruptcy, and more importantly just how important it is to America to do what they did, and I'll bet the car buying public will rally around them... Outside of the union ranks there's precious few people who care about the gravy train they've been riding.
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JSFORBES 10:26AM (7/18/2006)
I couldn't imagine a more concentrated force of mediocrity than GM and Ford combined. They would fail twice as fast.
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mickster 10:27AM (7/18/2006)
I think it would serve Toyota well-then they'll be able to buy one company instead of having to choose between the two.
If Toyota's growth continues, they'll soon be in a position for another "Merger of Equals;" in other words-a takeover of an American car company just as Dr. Z. and his Daimler cronies did to Chrysler...
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The other Bob 10:27AM (7/18/2006)
That is a even more terrible idea than a Nissan/GM alliance. There is even more duplication between brands, unlike the Mercedes Benz and Chrysler merger, which created one full-line company.
Two companies which have too much manufacturing capacity merging? How would that be better?
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Chris 10:28AM (7/18/2006)
That would get very ugly. Can you imagine the internal fighting over which products woulod have to go? Such a merger would set the company back 3 or 4 years while they make the necessary adjustments. Neither GM or Ford have that kind of time.
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Yatrik 10:33AM (7/18/2006)
I say go for it! They are both gonna crash and burn anyway, so why not make it a terrific spectacle while it happens! The sooner we can wash our hands of the filth that is the big two, the sooner TRUE american passion and american engineering can flourish.
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Howard Kerr 10:37AM (7/18/2006)
Man, the parallels to the current U.S. car market and the now, no longer existing, British domestic car market of the '60s and '70s is scary. After folding nearly all the little companies into one large company...with BIGGER problems, that large company (finally?) sank into oblivion of it's own weight. Of course, before it died, it made desperate/pathetic pleas to the British car buying public to buy it's products...out of a sense of patriotism. Historians are still arguing whether it was the unions or the management that caused the whole mess. Conveniently forgetting, how crappy the quality of the cars was and how stodgy the designs were.
Ford and GM, put together, would NEVER get to 40% of the market. The overlap that exists in each company, not to mention between each company, would quickly drive out brands AND customers.
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Corey W. 10:42AM (7/18/2006)
It would never happen.... They both would go into bankruptcy before merging with the other.
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Bob 10:45AM (7/18/2006)
I love it, can you imagine the Mustaro, Fivepala, or how about the Equiplorer? Not to mention the GTvette. Oh, wait my crack high just wore off. Bad idea.
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Den in IN 10:46AM (7/18/2006)
This is laughable. Just consider the ego driven management in both companies. The UAW would have nothing to fear because all that would ever get done is elimination of the other companies management in a tit for tat battle of pink slips that would last for decades.
Its defiantly crack.
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mickster 10:51AM (7/18/2006)
By the way, the failure rate of mergers valued at over $1 Billion is about 53% according to one recent study (so it's about the same as marriages).
Unless the joint company could slim down, rather than bulking up (just look at the costs Saab, Volvo, Aston Martin, Jaguar, Land Rover, Hummer, Mazda, Suzuki, Fiat and other merger/partnerships have cost GM & Ford), it will surely fail and fail fast.
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Tucker Goodrich 10:51AM (7/18/2006)
There's a phrase in the merger business to describe deals like this: "Tie two rocks together and hope they float."
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Mal Fuller 10:56AM (7/18/2006)
This isn't April Fools Day! Someone's on some powerful drugs.
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Ryan 11:02AM (7/18/2006)
Cocaine is one helluva drug...
You have a better chance of seeing Jebus walk on water...
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