Report: GM, Ford Executives Discussed Possibility of Merger

Executives of General Motors Corp. (GM) and Ford Motor Co. (F) have discussed a possible merger or alliance, the trade journal Automotive News reported Monday. Both companies declined comment.

Automotive News quoted what it said were several people familiar with the talks as saying that discussions involving senior executives began in July and are not taking place now.

The journal quoted one source as saying that GM Chief Financial Officer Fritz Henderson and his Ford counterpart, Don Leclair, discussed a GM-Ford alliance in August.

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The report comes as GM and Ford have been slashing their work forces and closing plants in efforts to reverse multibillion dollar losses. Their sales have been hurt by competition from more fuel-efficient models from Asian automakers.

Two auto analysts said an outright GM-Ford merger is unlikely, and even lower-level cooperation that now takes place on such issues as hybrid vehicles, production technology and components requires careful attention to antitrust laws.

In July, GM, Renault SA of France and Nissan Motor Co. of Japan announced a 90-day review of an alliance among them.

"As we've often said, GM officials routinely discuss issues of mutual interest with other automakers," GM spokesman Brian Akre said before business hours Monday. "As a policy, we do not confirm or comment publicly on those private discussions, which in many cases do not lead anywhere."

Ford's Oscar Suris, also speaking before business hours, said: "We're not commenting on speculation."

"It would surprise me if there were a coming-together on the grand level," said David Cole, head of the Center for Automotive Research in Ann Arbor.

"I don't see it from a business standpoint," said analyst Charles Fleetham of Project Innovations in Farmington Hills. "They have the same high health costs, high union costs, ineffective white collar work force that they want to get rid of."

Somewhere down the line, though, the number of companies that make cars is going to shrink, Cole said.

"There's going to be more consolidation. I think it's going to accelerate," Cole said.

Ford and GM very well could start more joint efforts similar to their current work to develop a six-speed automatic transmission, Cole said, adding, that contacts between automakers "go on all the time at the senior level."

Talk of alliances involving GM came after GM shareholder Kirk Kerkorian, who owns a 9.9 percent stake in the company, called for GM, Renault and Nissan to pursue an alliance.

Carlos Ghosn, the chief executive of Renault and Nissan, has said the benefits from an alliance would be similar to the gains from the Renault-Nissan alliance, which have included cost savings from joint purchases of auto parts.

Ford earlier declined to comment on an August Wall Street Journal report that then-Chief Executive Bill Ford approached Ghosn about a Ford alliance with Renault and Nissan.