RE: Alternative Reality 435: If Ford Merged With GM
Tuesday 4th October 2011
Is this the future that could have been?Here's an odd 'what if?' scenario for you: what if, during the financial crisis of 2008-2009, General Motors had merged with Ford?
Alternative Reality 435: If Ford Merged With GM
New book reveals that Ford and The General held secret merger talks back in 2008
Is this the future that could have been?
And it's not as crazy as it sounds, because a new book by Bill Vlasic, published today and called Once Upon a Car: The Fall and Resurrection of America's Big Three Automakers - GM, Ford and Chrysler reveals that Ford CEO Alan Mulally and GM head honcho Rick Wagoner held secret merger talks back in 2008.
History, of course, reveals that GM needed the help more than Ford; the Blue Oval was the only one of the US 'Big Three' not to plunge into bankruptcy in the aftermath of the credit crunch, and it was Ford man Mulally who killed the idea of a merger.
But what if things had been different? What would a merged Ford and GM look like? How many jobs would have been lost? And whose products would have won out? Would we be driving around in Ford Insignias or Vauxhall Mondeos? What else would we see happening? All interesting questions to ponder...
Discussion
Seeing as how I work at a car firm that is both Ford and GM (Opel/Chevrolet) dealer, that would be interesting indeed!
Also, Ford and Mazda work closely together and share a lot of parts, it'd be funny to see a Opel/Vauxhall built on the MX-5 platform... finally an Opel with decent handling!
Also, Ford and Mazda work closely together and share a lot of parts, it'd be funny to see a Opel/Vauxhall built on the MX-5 platform... finally an Opel with decent handling!
Draexin said:
Seeing as how I work at a car firm that is both Ford and GM (Opel/Chevrolet) dealer, that would be interesting indeed!
Also, Ford and Mazda work closely together and share a lot of parts, it'd be funny to see a Opel/Vauxhall built on the MX-5 platform... finally an Opel with decent handling!
Also, Ford and Mazda work closely together and share a lot of parts, it'd be funny to see a Opel/Vauxhall built on the MX-5 platform... finally an Opel with decent handling!
I cannot see how merging Ford and GM would work.
Merger occurs when both firms can eliminate duplicate production facilities while maintaining or increasing total product. However, Ford and GM are unusual in that most of their costs are fixed, even much of the cost of labour is fixed because of unions negotiated packages that even pay workers after they leave the firms.
It is unlikely both firms can achieve any cost savings for either firms beyond what they can accomplish separately.
As such, the average total cost curve would move northward as the new merged firm would have fixed costs roughly equal to double those of one firm.
Total product of the merged firm would be roughly doublne that of each firm before the merger, the average total cost would be unchanged.
What would make sense is for Ford or GM to merge with a firm that has a fundamentally different cost structure (i.e. one where the labour cost base is perfectly elastic, or where one that the R&D value add is substantial) and pay BELOW the economic profit for these firm.
Only then they can improve on their marginal profits.
Merger occurs when both firms can eliminate duplicate production facilities while maintaining or increasing total product. However, Ford and GM are unusual in that most of their costs are fixed, even much of the cost of labour is fixed because of unions negotiated packages that even pay workers after they leave the firms.
It is unlikely both firms can achieve any cost savings for either firms beyond what they can accomplish separately.
As such, the average total cost curve would move northward as the new merged firm would have fixed costs roughly equal to double those of one firm.
Total product of the merged firm would be roughly doublne that of each firm before the merger, the average total cost would be unchanged.
What would make sense is for Ford or GM to merge with a firm that has a fundamentally different cost structure (i.e. one where the labour cost base is perfectly elastic, or where one that the R&D value add is substantial) and pay BELOW the economic profit for these firm.
Only then they can improve on their marginal profits.
Maybe they'd kill off the Vauxhall brand. It amazes me that a brand for a single country survives.
We all know that under the Vauxhall badge there's an Opel one. I had a Corsa that was built in Spain, a Vectra built in Belgium - oh hang on a minute, didn't they bin off the Vauxhall model names a while back (except Astra) and adopt Opel ones? Admittedly Astra is a better name than Kadett. I wonder how much it would save GM in branding costs alone if they did away with the Vauxhall brand. After all even i can remember when the dealerships were GM/Vauxhall/Opel and you could buy Opels in the UK.
I've nothing against the products but how many would prefer a Holden Monaro to a Vauxhall? If we just had GM dealers in the UK where you could purchase GM products it would give the consumer more choice. Imagine if you could go to one dealer and order any Chevrolet (inc USA models - i know we get camaro & corvette here), GMC, Opel, Vauxhall, Holden, or Isuzu. So much choice! I might have even bought a GM product instead of spending nearly £30k with Mitsubishi.
I bet this stirs it up a bit.
We all know that under the Vauxhall badge there's an Opel one. I had a Corsa that was built in Spain, a Vectra built in Belgium - oh hang on a minute, didn't they bin off the Vauxhall model names a while back (except Astra) and adopt Opel ones? Admittedly Astra is a better name than Kadett. I wonder how much it would save GM in branding costs alone if they did away with the Vauxhall brand. After all even i can remember when the dealerships were GM/Vauxhall/Opel and you could buy Opels in the UK.
I've nothing against the products but how many would prefer a Holden Monaro to a Vauxhall? If we just had GM dealers in the UK where you could purchase GM products it would give the consumer more choice. Imagine if you could go to one dealer and order any Chevrolet (inc USA models - i know we get camaro & corvette here), GMC, Opel, Vauxhall, Holden, or Isuzu. So much choice! I might have even bought a GM product instead of spending nearly £30k with Mitsubishi.
I bet this stirs it up a bit.
Edited by E-B on Tuesday 4th October 12:09
E-B said:
Maybe they'd kill off the Vauxhall brand. It amazes me that a brand for a single country survives.
We all know that under the Vauxhall badge there's an Opel one. I had a Corsa that was built in Spain, a Vectra built in Belgium - oh hang on a minute, didn't they bin off the Vauxhall model names a while back (except Astra) and adopt Opel ones? Admittedly Astra is a better name than Kadett. I wonder how much it would save GM in branding costs alone if they did away with the Vauxhall brand. After all even i can remember when the dealerships were GM/Vauxhall/Opel and you could buy Opels in the UK.
I've nothing against the products but how many would prefer a Holden Monaro to a Vauxhall? If we just had GM dealers in the UK where you could purchase GM products it would give the consumer more choice. Imagine if you could go to one dealer and order any Chevrolet (inc USA models - i know we get camaro & corvette here), GMC, Opel, Vauxhall, Holden, or Isuzu. So much choice! I might have even bought a GM product instead of spending nearly £30k with Mitsubishi.
I bet this stirs it up a bit.
I agree, i think doing away with the very dated Vauxhall brand would be a good thing, Opel for all of Europe would make sense. We all know that under the Vauxhall badge there's an Opel one. I had a Corsa that was built in Spain, a Vectra built in Belgium - oh hang on a minute, didn't they bin off the Vauxhall model names a while back (except Astra) and adopt Opel ones? Admittedly Astra is a better name than Kadett. I wonder how much it would save GM in branding costs alone if they did away with the Vauxhall brand. After all even i can remember when the dealerships were GM/Vauxhall/Opel and you could buy Opels in the UK.
I've nothing against the products but how many would prefer a Holden Monaro to a Vauxhall? If we just had GM dealers in the UK where you could purchase GM products it would give the consumer more choice. Imagine if you could go to one dealer and order any Chevrolet (inc USA models - i know we get camaro & corvette here), GMC, Opel, Vauxhall, Holden, or Isuzu. So much choice! I might have even bought a GM product instead of spending nearly £30k with Mitsubishi.
I bet this stirs it up a bit.
Edited by E-B on Tuesday 4th October 12:09
thewheelman said:
E-B said:
Maybe they'd kill off the Vauxhall brand. It amazes me that a brand for a single country survives.
We all know that under the Vauxhall badge there's an Opel one. I had a Corsa that was built in Spain, a Vectra built in Belgium - oh hang on a minute, didn't they bin off the Vauxhall model names a while back (except Astra) and adopt Opel ones? Admittedly Astra is a better name than Kadett. I wonder how much it would save GM in branding costs alone if they did away with the Vauxhall brand. After all even i can remember when the dealerships were GM/Vauxhall/Opel and you could buy Opels in the UK.
I've nothing against the products but how many would prefer a Holden Monaro to a Vauxhall? If we just had GM dealers in the UK where you could purchase GM products it would give the consumer more choice. Imagine if you could go to one dealer and order any Chevrolet (inc USA models - i know we get camaro & corvette here), GMC, Opel, Vauxhall, Holden, or Isuzu. So much choice! I might have even bought a GM product instead of spending nearly £30k with Mitsubishi.
I bet this stirs it up a bit.
I agree, i think doing away with the very dated Vauxhall brand would be a good thing, Opel for all of Europe would make sense. We all know that under the Vauxhall badge there's an Opel one. I had a Corsa that was built in Spain, a Vectra built in Belgium - oh hang on a minute, didn't they bin off the Vauxhall model names a while back (except Astra) and adopt Opel ones? Admittedly Astra is a better name than Kadett. I wonder how much it would save GM in branding costs alone if they did away with the Vauxhall brand. After all even i can remember when the dealerships were GM/Vauxhall/Opel and you could buy Opels in the UK.
I've nothing against the products but how many would prefer a Holden Monaro to a Vauxhall? If we just had GM dealers in the UK where you could purchase GM products it would give the consumer more choice. Imagine if you could go to one dealer and order any Chevrolet (inc USA models - i know we get camaro & corvette here), GMC, Opel, Vauxhall, Holden, or Isuzu. So much choice! I might have even bought a GM product instead of spending nearly £30k with Mitsubishi.
I bet this stirs it up a bit.
Edited by E-B on Tuesday 4th October 12:09
That's probably true, but the rust and rattles from the late '80s/early-mid '90s (after Detroit basically told successful GM Europe to engineer their cars a little more cheaply so they could send more pennies across the big lake to keep the mothership afloat) are a bit closer to people's minds here. Also Opel already did have a rather pedestrian image back here back when they were building durable and reliable cars ('Jeder Popel fährt ein Opel').
It would have been a freaking disaster. There is very little mutual respect between Ford people and Chevrolet people. They are rivals. Their buyers, if not brand-loyal to themselves, are certainly brand-averse to the other. It's part of the fun.
It would be like merging Miller and Budweiser, the Lakers and the Celtics, Lotus with Ferrari, dogs with cats.
It would be like merging Miller and Budweiser, the Lakers and the Celtics, Lotus with Ferrari, dogs with cats.
Edited by mikEsprit on Wednesday 5th October 02:00
Gassing Station | Motoring News | Top of Page | What's New | My Stuff