Autoblog

Bill Vlasic, the man who was kind enough to drop the GM/Chrysler pseudo-bombshell on us late Friday night, posted a follow-up to his remarkably unremarkable story claiming that General Motors originally had talks with Ford about a possible merger before approaching the Pentastar people.

Again, the New York Times' scribe cites two unnamed sources about the merger discussions, reporting that GM approached Ford with the proposal, only to have FoMoCo execs shoot down the idea after several meetings. The talks included GM CEO Rick Wagoner, president Frederick Henderson, Ford's executive chairman Bill Ford Jr. and chief exec Alan Mulally.

According to the NYT's shy sources, the Blue Oval boys broke off talks in September when Ford and Mulally came to the conclusion that Ford would be better off reorganizing on its own rather than being tied to another automaker.

The Detroit News got in on the action yesterday, citing another anonymous source that said, "There were never in-depth, substantive discussions that went on. It was more an expression of interest [on GM's part], as in, 'Do you want to talk?'" Ford declined.

While all these reports are great at selling dead trees (and generating page-views), it deserves noting that high-level discussions between automakers are nothing new and hardly uncommon. Recent discussions – particularly those in the cited time-frame of three or four months, when federal loans to Detroit's Big Three were on everyone's lips – are surely newsworthy, let's not forget that parts sharing, from transmissions to hybrid drivetrains, have been happening routinely over the last few years. All this leads us to believe that business between Motown's finest will continue unchanged (for better and worse) and that unbelievable headlines are exactly that.

[Sources: NYT, Detroit News]

Of all the preposterous ideas floated around this, the new automotive landscape, none seem as ridiculous as Ford and General Motors merging together to create a singular domestic monolith. But according to a BusinessWeek source, the idea was recently floated by execs during a meeting of the General's generals... and then shot down moments later.

While we wouldn't describe this as a close call, the fact that it was even mentioned speaks volumes about the dire straits Detroit's Big 3 (or 2.8, if you prefer) are in. Between plummeting sales, increased material costs, high fuel prices and union woes, both automakers are facing seemingly insurmountable challenges. But creating a $350 billion bloated corporate entity with excess production capacity, weak brands and more cannibalizing product overlap than has ever been seen, there's no doubt that it would be suicide for all involved. Not to mention the fact that the amount of resources necessary to pull of such a Herculean task would take precious time and money away from righting both automakers and their ailing product portfolios. Thankfully, that's why the idea was dropped within minutes of its introduction.

[Source: BusinessWeek]

Swiss-born GM Vice Chairman Bob Lutz was asked by a Swiss newspaper Sunday if his company would go it alone or seek a merger with Ford. Lutz answered, "We are open to alliances. But we can also be successful alone."

Does this mean GM and Ford are talking merger? Not likely, but it could mean more cooperation in the future, like the co-developed 6-speed transmission being used in Ford's Edge and Saturn's Aura.

Lutz also said GM was still open to working with Renault-Nissan despite a recent report saying Renault-Nissan CEO Carlos Ghosn was no longer interested in talking to U.S. automakers about possible alliances.

[Source: SonntagsZeitung via Reuters]