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Re: gm / ford alliance
"Masked" <Masked@mm.m> wrote in message
news:180920062159249885%Masked@mm.m...[color=blue]
> In article <xn0erd6195wcigi002@news.readfreenews.net>, badgolferman
> <REMOVETHISbadgolferman@gmail.com> wrote:
>[color=green]
>> [url]http://news.yahoo.com/s/ap/20060918/ap_on_bi_ge/gm_ford_3[/url]
>>
>> DETROIT - Executives of General Motors Corp. and Ford Motor Co. have
>> discussed a possible merger or alliance, the trade journal Automotive
>> News reported Monday.[/color]
>
> The market will go wild. Imagine the chance to invest in the merger of
> two companies of proven ineptitude. We're all still a-twitter at the
> brilliant results from the Nash-Hudson and Studebaker-Packard mergers.[/color]
Well at least Nash-Hudson lived on - first as American Motors, then as part
of Chrysler, and now as part of DiamlerChrysler. Toyota has absorbed (merged
with) a number of other Japanese automotive companies, and owns significant
percentages of several others. And for that matter, Studebaker-Packard
Corporation did not die, they just quit making cars (did you know that STP
was orignally a Studebaker-Packard Corporation Product - it has been sold
off, but it started there)?
Ford and GMs "ineptitude" was fairly predictable. As long as their high end
products were selling well, they could support the high pay and benefits won
by the UAW over the last 70 years. However there is no way they can build
competitive small cars in the US with that cost structure. It would be
interesting to see how smart Toyota executives would be if they were saddled
with similar UAW contracts. Unfortunately in this country, the only way to
get out from under a labor contract is to either survive a massive strike or
declare bankruptcy. Neither option is very appealing to GM or Ford. Ford
does reasonably well in the rest of the world, as does GM. The US problems
can be traced to a very open economy that allows import brands to easily
move in and very restrictive union contracts that saddle GM and Ford with
high per unit costs. Now you can blame the management at Ford or GM for
agreeing to bad labor deals, but you'll have to explain to me how they could
have avoided them. I keep reading how well Toyota gets along with its US
suppliers, but it is common knowledge that Toyota squeezes the heck out of
it's Japanese and Asian suppliers. They have the same attitude as Wal*Mart,
give us this at our price or you are out of business. When Ford and GM try
this in the US, they are lambasted.
BTW, my main complaint against US auto executives (actually, most US
executives regardless of industry) is that they are way overpaid. It is
important to understand that executive compensation between US and Japanese
or European executives cannot be directly compared because of cultural and
financial differences, but still many US executives run companies into the
ground while maximizing their own rewards. I blame this on the stock
holders, who hide their heads in the sand and allow CEO to select their own
overseers.
Ed
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