General Motors talked merger with Ford first

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GM Rethinks Fuel Efficiency and Brand Futures

This weekend’s story about General Motors and Chrysler merger talks seemed like a shock. But as it turns out, it’s more like closing time and GM is looking to take anyone desperate home from the bar. According to the New York Times, GM and Ford began merger talks in July. When the talks broke down last month, GM turned its bar stool to the other side and started to see if Chrysler wanted to go home with it.

Ford broke off the talks in September, because it seemed to have concluded that it had a better chance to reorganize on its own than in tandem with another automaker. “What we can say is that we are convinced our best opportunity is to continue to integrate Ford and leverage our global assets,” Ford spokesman Mark Truby told the New York Times. “That remains Ford’s focus.”

A GM/Chrysler deal may take a few weeks for executives to figure out if it is advantageous enough to work. Also, General Motors is not the only one trying to take Chrysler back to its bachelor pad. The swinging duo of Renault-Nissan has been lurking in the shadows. It has set up manufacturing deals with Chrysler and is exploring the possibilities of ownership.

The operations of Chrysler and General Motors are not too different in the struggling North America. Unlike a merger with a foreign brand that may have a strength in smaller cars, GM and Chrysler have similar product lines. Their merger would likely mean making people and cars redundant (less employees and less plants.) So while the businesses may survive the tough road ahead, they may be a shadow of their former selves.

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