Ford CEO meets with Toyota on potential partnership

The old saying goes that if you can't beat 'em, join 'em. Ford has long since resigned itself to the fact that the #2 automaker in the U.S. will soon not be wearing a Blue Oval for a badge. Instead, Toyota is expected to occupy the numero dos position as soon as January, with Ford's market share continuing its slide down into the low teens and Toyota's moving every upward.
Thus, it might not come as a surprise to learn that Ford CEO Alan Mulally and his right hand man Mark Fields made a trip to Japan last Wednesday to sit down and talk with Toyota execs. The report comes from inside a Japanese trade journal called Nikkei Net Insider and claims, "the meeting is considered as a first step in the exploration of a potential partnership."

[Source: Nikkie Net Insider - sub. required via Jalopnik]

The word "partnership" (also "alliance," "merger," "acquisition," etc.) have all become buzzwords in the auto industry this year thanks to the three-month circus show that revolved around the possibility of General Motors forming a partnership with Nissan/Renault. That hook up ultimately didn't happen for the apparent reason that General Motors would get the short end of the stick, and news of a potential partnership between Ford and Toyota has us wondering what each automaker would bring to the table. Ford has a bunch of excess production capacity based in the U.S., which Toyota will likely need more of it hopes to topple our other domestic automaker as King of the Hill. For its part, Toyota has lots of technology to offer, as well as experience on building a rock solid reputation for fine automobiles (although one could easily argue that Ford is the one building the better vehicles as of late).

Regardless of what would be put on the table, a partnership between these two companies would likely not be a "merger of equals" like the deal that allowed Daimler-Benz to swallow Chrysler in 1998, but rather a swapping of and intertwining of resources that allow the two enjoy larger economies of scale than they could on their own.

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