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]