Dodge Challenger Forums - Ford, GM toy with merger talks, report says

That would be like HP buying Compaq and it would take several years for it to be fruitful and those were high tech companies
that are used to thinking outside the box. Ford and GM aren't used to doing that.

Ford, GM toy with merger talks, report says

Sources familiar with discussions say talks are not currently active and may not prove fruitful, paper reports.
September 18 2006: 4:33 PM EDT
CHICAGO (Reuters) -- Senior executives at General Motors Corp. and Ford Motor Co. have discussed a merger or alliance, industry newspaper Automotive News reported Monday.

Citing several sources familiar with the talks, the paper said it was not clear whether the negotiations will bear fruit.

As of now, the two companies, both struggling with shrinking market shares while restructuring operations, are not holding talks, and one source said there is a slim chance that anything will come of the situation, Automotive News said.

GM and Ford declined to confirm any talks.

Shares of GM (down $0.18 to $31.48, Charts) fell less than 1 percent, while shares of Ford (down $0.20 to $7.82, Charts) dropped nearly 3 percent during morning trade on the New York Stock Exchange.

"As we've often said, GM officials routinely discuss issues of mutual interest with other automakers," GM spokesman Brian Akre said.

"As a policy, we do not confirm or comment publicly on those private discussions, which in many cases never lead anywhere." Ford spokesman Tom Hoyt said, adding the automaker does not comment on speculation.

Friday, Ford said it would slash $5 billion in costs and one-third of its work force as it warned its auto business would not make a profit in North America for another three years.

It also suspended its dividend and pledged to revamp a vehicle lineup seen as weak by analysts.

Disappointed investors
However, the No. 2 U.S. automaker ruled out an immediate sale of its Jaguar brand, disappointing investors who wanted Ford to press ahead with asset sales to raise cash, sending shares to their biggest single-day percentage decline in almost four years.

Earlier this month, Ford named Alan Mulally, a former Boeing Co. (up $0.20 to $75.21, Charts) executive, as chief executive, ending the troubled five-year stint of Bill Ford Jr. as the company's operational head.

GM is in the midst of its own restructuring as it tries to recover from a $10.6 billion loss in 2005.

Turnaround efforts at the world's largest automaker have gained traction this year as 34,400 workers - about a third of its work force - have accepted early retirement and buyout offers. GM is also closing 12 plants.

Still, CEO Rick Wagoner is under pressure to show further improvement as GM studies a possible tie-up with Nissan Motor Co. Ltd. (up $0.14 to $22.58, Charts) and Renault SA (down $1.97 to $113.60, Charts) in which Nissan and Renault could buy up to a 20 percent stake in GM.

That deal, urged by GM's largest individual shareholder, billionaire investor Kirk Kerkorian, has been widely viewed as a means of prodding Wagoner to speed up the company's turnaround efforts.

Last year, GM and Ford agreed to jointly develop a new 6-speed transmission, which is in production in plants at both companies.

Shares of rival automaker Daimler Chrysler (Charts) edged higher Friday after it said it would cut U.S. production through the end of 2006. Toyota (Charts) shares were slightly lower.