GM News, New Models and Market Share

bumpy

AM General built the H1 and H2 under contract for GM, and GM builds the H3 itself.

bumpy

HEI is basically higher voltage for the sparkplugs. GM may have had a lower-energy magnetic pickup for the distributor before HEI, but I wouldn't be surprised if it was still points.

62vetteefp

In addition to getting the coolest Buicks which are not available in America, individuals in China are about to get the best vehicle that Buick has to offer in the States. In a deal which was initially inked ten months ago, the attractive Enclave CUV, built at GM's Lansing Delta Township assembly plant, is headed for China.

The U.S. assembled 'utes will make their way by means of Shanghai GM. The exportation of the Enclave to China is only surprising in that it took so long for the General to get the model there in the first place. After all, Buick sells more vehicles in China than anywhere else in the world, with the nation consuming over half of all Buicks worldwide. We can only hope that Shanghai GM returns the favor and sends some of its best designs our way... and soon.

Golly gee, it has only been out about 6 months. And up to now at least it was at capacity.

62vetteefp

GM Daewoo Auto and Technology Co. will be reentering the country's market for large sedans with the new Statesman later in the year. According to news reports, the car will be launched in September. However, company officials said that although the launch is planned this year, the exact date has not been decided.

Based on the concept car L4X shown at last year's Seoul International Motor Show, the new Statesman will replace the old version that was discontinued. The older version was unsuccessful on the local market - less than 2,000 units were sold here between June 2005 and its discontinuation in March 2007.

As with the previous Statesman, the new car is produced by General Motors Corp.'s Australian subsidiary GM Holden Ltd., and will be rebadged as a GM Daewoo product for the local market.

62vetteefp

A decision by GM Holden to import the Chevrolet Camaro, shown in production ready form in Melbourne earlier this week, is the lynchpin for the decision to go ahead with a right-hand drive version of the US sports car.

Speaking with CarAdvice at the reveal of the Chevrolet Camaro, Greg Stefanyshyn, GM’s Global Vehicle Line Executive, who’s spent the past two years in Australia shepherding the project said Australia was crucial to any decision to build a right-hand drive version of the Camaro.

“If we don’t get Holden support for RHD then it won’t happen, it’s as simple as that,” Mr Stefanyshyn told CarAdvice.

He added that the decision would be made within the next two months and said he doubted the other RHD markets around the world would have the numbers to influence a decision without Australia.

Asked what sort of numbers General Motors needed to support a RHD program he said, based on work done before the current oil-price surge, the company needed to build about 4000 vehicles a year.

When we suggested that GM Holden shouldn’t have too much trouble selling half that number in Australia he said it agreed with empirical evidence from other sources.

62vetteefp

General Motors Corp. plans to report its second-quarter financial results on Friday, the company announced today.

The company is expected to report a “significant second-quarter loss,” GM CFO Ray Young said on July 15 when the automaker outlined its plans for conserving and raising $15 billion through 2009 to improve its cash on hand and convince Wall Street that it is not headed for bankruptcy.

Young said then that the second-quarter loss would be, “driven in part by the previously disclosed negative impact of the American Axle and local union strikes in North America, as well as the continued weakness in the U.S. auto market and adverse vehicle segment mix.”

62vetteefp

General Motors Corp. is looking to cut its U.S. salaried headcount by 15%, or around 5,000 workers, by Nov. 1 as part of a plan to trim $10 billion in annual expenses, according to people briefed on the plan.

The auto maker previously said it was planning a 20% reduction in salaried-worker costs, including a combination of benefit reductions and job cuts.

GM hopes to convince workers to leave voluntarily by offering early retirement incentives rather than forcing layoffs. The company is expected to soon roll out offers to workers that will include both cash incentives and the chance for some to leave the company early with full pension benefits.

GM has reduced its white-collar work force 40% since 2000, down to about 32,000 employees, as part of a massive downsizing under way for much of this decade.

62vetteefp

Wonder when/if Honda and Toyota will cut wages/beni's at their facilities?

Aiming to lower labor costs, Nissan Motor Co. offered buyout packages to 6,600 workers at two Tennessee plants, the latest move by auto makers to adjust to the shrinking U.S. vehicle market.

Technicians and salaried employees at the two plants can receive one-time payments of up to $125,000, as well as medical and car-purchase benefits, Nissan said. The Japanese company is aiming to eliminate 1,200 jobs in the program that will last three years.

The move follows large-scale buyouts of both blue-collar and white-collar workers at U.S. domestic auto makers that are rushing to reduce costs as vehicle sales contract at their fastest pace in decades. Nissan has cut shifts at two of its truck-producing U.S. plants.

The industry continues to look for cost savings after Detroit's Big Three auto makers cut wages last year with new union contracts. Nissan's Japanese rivals, Honda Motor Co. and Toyota Motor Corp., have opened new plants in the U.S. that pay lower wages than Nissan.
"The marketplace is changing and Nissan's North American manufacturing operations must change with it to remain competitive," Nissan executive Bill Krueger said in a statement.

sls002

My guess would be that GM_Cadillac wanted limited production of the digital fuel injection system the first year so that they could keep up with production and fix any problems. I would also guess that California certification might have taken longer. I would not think that the engine was dirtier and should have been cleaner than the carburetors since the throttle body replaces the carb and fuel metering is more precise. What I remembered was the Seville with the digital fuel injection.

andre1969

Yeah, it seemed a bit counterintuitive to me that the digital fuel injection would be dirtier, but sometimes you just never know I guess. That California certification makes sense, could have just taken too long to cut through the paperwork.

Motortrend tested a 1980 Seville with the 368, and for a car of that era, it was actually pretty impressive. 0-60 came up in about 10.6 seconds...not impressive today, but probably quicker than the vast majority of cars out there at the time. They also tested a Mark VI in that comparison. It came in at 11.0 seconds, helped by a 4-speed automatic and shorter 3.00:1 gearing. There was also a New Yorker 5th Ave, the poor thing stuck with a 120 hp 318-2bbl, that managed an embarrassing 14.1 seconds from 0-60. For something that only had 145 hp, a doggy 2.41:1 axle, and probably still weighed two tons despite being "smallish", I think 10.6 seconds is pretty impressive!

dieselone

One thing with the late 70's and early 80's cars with v8 engines, they still had a decent amount of torque at a low rpm. In normal driving they didn't feel as slow. They just didn't have any guts when you punched them.

I don't think HP really jumped until the 90's. I remember my dad's '92 Crown Vic (first year it used the 4.6) had 190hp (210 w/ dual exhaust) and something like 260ft-lbs of torque. I think 0-60 was around 9 seconds. Now we have v6's that offer more HP and torque.

andre1969

One thing with the late 70's and early 80's cars with v8 engines, they still had a decent amount of torque at a low rpm. In normal driving they didn't feel as slow. They just didn't have any guts when you punched them.

Yeah, I think my '79 New Yorker's 360 has around 280 ft-lb of torque, and my '76 LeMans is probably close. That peak torque also comes on really early. I think it's 2400 rpm for the Chrysler, but not sure about the Pontiac. So with the slightest tap, they can almost throw you back in your seat and snap your neck (provided they don't stall out. ) But they still take about 11-12 seconds to get you from 0-60.

aspesisteve

did I read that right? GM will bring a right hand drive version of the Camero or any car for that matter to the US?

They can't afford to make a separate design with a left sided stearing wheel??

big mistake if that's true.

Where's word on a GM version of the Prius?
The Prius has been out for 4-5 years now and what does GM have to counter it?

62vetteefp

did I read that right? GM will bring a right hand drive version of the Camero or any car for that matter to the US?

They can't afford to make a separate design with a left sided stearing wheel??

Either you are a very funny guy or

62vetteefp

In a letter to General Motors' dealers today, GMAC Financial Services says it will raise interest rates for dealer floorplan financing and boost consumer financing rates.
The increases will affect consumer leases and purchases of new and used vehicles.
GMAC also is working with GM to reduce the number of U.S. leases in which GM offers a rate below the standard rate."GMAC is taking steps to align its financing program to changing market conditions," says Sue Mallino, a GMAC spokeswoman.

At least so far they are just not offering leases at below market rate.

cooterbfd

They can't afford to make a separate design with a left sided stearing wheel??

big mistake if that's true.

If you're not being sarcastic, then it's amazing. IIRC the Yaris, Fit, and Versa are all sold in Japan as RHD versions of what we get here.

Isn't the Nissan Cube going to be a LHD version of what they sell over there???

I don't think that Rolls Royce develops a separate version of their cars for NA. Aren't they designed to be built either way???

62vetteefp

Wow

OK the article talked about importing the Camaro in RHD FROM Canada TO Australia.

The Camaro is being made IN Canada FOR sale here. IF they make a RHD it would be easier to sell in nations (Europe, Austrailia, Japan) that drive RHD vehicles.

62vetteefp

General Motors (NYSE: GM) today announced its financial results for the second quarter of 2008, which include significant charges and special items. The reported net loss was $15.5 billion or $27.33 per share for the second quarter, including these charges and special items, compared with net income from continuing operations of $784 million or $1.37 per share in the second quarter of 2007. On an adjusted basis, GM posted a net loss of $6.3 billion or $11.21 per share, compared with net income from continuing operations of $1.3 billion or $2.29 per share in the same period last year.

GM recorded $9.1 billion of special items, predominantly non-cash in nature for the current quarter or near-term periods, which include:

$3.3 billion relating to the 2008 GMNA hourly special attrition program
$2.8 billion adjustment to the Delphi reserve
$1.1 billion GMNA restructuring and capacity related costs
$1.3 billion impairment of GM’s equity interest in GMAC
$340 million Canadian Auto Workers contract-related accounting charges
$197 million related to settlement of the strike at American Axle
Details on these and all other special items are in the financial highlights section of this release.

In addition, the GMNA adjusted net income results reflect a $1.6 billion charge related to lower residual values for off-lease vehicles. The total impact of declining residual values in GM’s second quarter earnings was $2.0 billion, including impairments of lease assets at both GMAC and GM.



http://media.gm.com/servlet/GatewayServlet?target=http://image.emerald.gm.com/gm- news/viewpressreldetail.do?domain=2&docid=47617target=http://image.emerald.gm.co- m/gmnews/viewpressreldetail.do?domain=2&docid=47617

circlew

It's getting darker...

GM ended the second quarter with $21 billion in cash and $5 billion in credit facilities. It said it had provided notice in July that it would draw down $1 billion under a secured revolving loan facility.

The struggling automaker's cash position has become an increasing concern for investors and analysts, who have begun to question whether and when GM's liquidity could fall below the levels needed to run its cash-hungry global operations.

Ratings agency Standard & Poor's on Thursday downgraded GM to "B-minus" and warned the automaker was on track to burn through roughly $4 billion per quarter this year, sending GM bonds to a record low price.

After losses totalling $51 billion over the previous three years, and a $3.25 billion loss in the first quarter, GM faced a battery of problems in the second quarter, including a slide in U.S. sales that sent its shares to a 54-year low.

What's a investor and customer to do? (PS, I'm a customer and investor). This bothers me more than the die hards because I have a memory of what once was and proceeded to be squandered to reach this bleak state of affairs.

Regards,
OW

imidazol97

>What's a investor and customer to do? (PS, I'm a customer and investor).

How many GMs do you own?

I've only seen you posting negatives and giving cheers when things were bad news for GM and rooting that they go out of business. Are you actually an investor? d the gov'nmt stepped in and saved them!)

nippononly

piece of this news is not really the $15 billion + in losses, as a lot of it was one-time charges, but rather it is the $4.4 billion they lost just on North American operations. It is easy to believe S&P's assessment that they will continue to lose money at this rate through the remainder of the year, and that means they have a year or less to right the ship before they essentially go under.

I guess maybe I was being a little too optimistic before when I was so bullish on GM's future among the domestics. This makes Ford look like it is weathering the storm pretty well, something I thought I would never say.

nwng

I think you and 62 should avoid reading anything about GM on financial sites today.

circlew

I own 1 car and an SUV. The car is a bmw 330xi and the SUV is a 2003 Yukon Denali.

I own shares in the S&P 500.

Regards,
OW

circlew

Now ask me 2 more questions:

How many GMs Did I Own? 10.

How many WILL I Own in the future? 0 Well, maybe a Corvette!!

Regards,
OW

dieselone

GM just has a lot higher cost structure than Ford. To many overlapping models, and to many retirees to support.

I think the fact that Ford is a smaller company helps them react a little quicker and they have a lot less retirees too. If I understand correctly, I believe Ford has had more favorable Union relations too.

While Ford is far from out of the woods, I think Alan Mulally may be able to right the ship. I like the fact that he got his experience outside the auto industry. The saying "That doesn't work in the auto biz" is probably not as much of a factor.

But it seems Ford and GM's outlook has been like a yo-yo. Every time I think one of them maybe out of the woods another shoe drops.

fezo

Isn't this the second quarter in a row that they told us it isn't really that bad because of one time write offs? You can only do that so long before there is nothing to write off.

Scary how 30 years ago GM's share of the domestic market was about what the former Big 3's share is today.

fezo

Mulally mortgaged off all of Ford's assets for cash to weather the storm. This apparently created enough cash to hold them through until the end of 09 last I heard.

The catch, of course, is that if they can't start turning a profit by then the well will be dry.

nippononly

I have often wondered if GM is just too big to be manageable any longer. Certainly as you said, its immense size is hurting it now, and has been ever since the huge contraction began.

It is too bad that the individual divisions are so intertwined now that they can't just be split back into sovereign individuals, with P-B-GMC as its own congomerate.

I think this latest news makes a sale of Saturn inevitable, and ASAP. It's too bad the sale couldn't involve the P-B-GMC franchise, as GM has spent so much money and time on Saturn recently.

Edit...has it been announced yet how much money they are getting for Hummer?

imidazol97

> Did I Own? 10.
>How many WILL I Own in the future? 0 Well, maybe a Corvette!!

Is your repetitive negativity due to a feeling in your mind that you are "hurting" GM in some way because you are unhappy with the cars (10) that you owned?

circlew

No, basically because they make unattractive, cheaply-made cars that are completely undesirable to ME!

BTW, I do not need to hurt GM...read the news. My wife did and now she wants a Toyota due to the uncountable trips for repairs to the Denali. Go figure!

Regards,
OW

dieselone

Mulally mortgaged off all of Ford's assets for cash to weather the storm. This apparently created enough cash to hold them through until the end of 09 last I heard.

The catch, of course, is that if they can't start turning a profit by then the well will be dry.

Very true. If Ford doesn't use the borrowed funds to make the needed changes and return to profits then they may have no choice but to declare bankruptcy, unless they can get someone to lend them some more $$$.

cooterbfd

From the files of Autoblog:

The Detroit 3 aren't the only automakers feeling the hurt from lease vehicles coming back worth much less than expected. Leases account for 60% of BMW's sales in the U.S. compared to just 20% of sales in the industry as a whole. As such, BMW will begin offering incentives like never before to encourage customers to buy a vehicle instead and reduce the number of leases it has on the books. In some cases the German brand is offering loans with finance rates as low as 0.9% over five years, and of course these incentives will be aided by a commensurate raise in lease prices, as well.

Nearly all luxury makers are in the same boat as BMW, as Bloomberg reports that leases also comprise 55% of sales at Mercedes-Benz, 43% at Lexus and 42% at Cadillac. While the residual value of luxury vehicles isn't falling quite as fast as SUVs and full-size trucks, the market's shift in preference to smaller, more fuel efficient vehicles means that there is less demand for vehicles that tend to conspicuously consume copious amounts of fuel.

62vetteefp

Really? I thought this was a 3 company issue only! You mean other companies have made the wrong decisions and not just GM was caught flat footed. :P

sls002

If BMW's don't depreciate (as some have suggested), why would leasing be a problem for BMW?

62vetteefp

If BMW's don't depreciate (as some have suggested), why would leasing be a problem for BMW?

Must be an urban legand!

Anyway it looks like the lux market is getting hammered with the SUV/truck market. Folks are cutting back.

Anybody notice gas is down to $3.73?

Maybe Obama will save the country? Does anyone know what a $15 billion profit is per gallon of gas sold?

Senator Obama today released the following statement on the news that GM posted a $15.5 billion loss in the second quarter of the year:

“In the past 24 hours, we’ve learned that GM lost $15 billion while Exxon-Mobil reaped a $12 billion profit and 51,000 Americans lost their jobs in the last month alone -- including 8,300 in the auto industry. Our economy has been turned upside down and the country is badly off track. We need a fundamental change in course – an emergency economic plan to provide $1,000 in relief for families and save more than one million jobs from being lost, investments in our manufacturing base, a trade policy that works for American workers, and support for our proud American auto industry as they make the transition to produce the next generation of fuel efficient cars. Most of all, we need a President that will offer us more than political spin about the benefits of ‘outsourcing’ and understands that the economic challenges facing Michigan families aren’t just ‘psychological.’”

62vetteefp

Chevrolet Malibu total sales up 79 Percent, Aveo up 17 percent and Cobalt up 4 percent compared with last July
Cadillac CTS sales increased 38 percent
Pontiac G5 sales up 17 percent, Vibe up 7 percent and G6 up 6 percent
Saturn Aura sales increased 24 percent with Sky up 14 percent, Astra has best month
Buick Enclave mid-utility crossover sales increase 28 percent

The newer car and crossover sales just cannot make up for the 35% in light truck sales.

Enclave is selling about the same as the Rainier, Rendy and Terazza did last year.
http://media.gm.com/servlet/GatewayServlet?target=http://image.emerald.gm.com/gm- news/viewpressreldetail.do?domain=2&docid=47624

torque_r

Toyota is right now the country's top selling brand (not division), and not only for the month but in year-to-date sales.

Sales though July:

Toyota: 1,278,617
Ford: 1,117,746
Chevrolet: 1,102,488

So Toyota outsold Ford by more than 160,000 units so far. This is going to be hard to reverse in 5 months.

circlew

Great news! Here's some more.

In markets other than North America, General Motors posted a gain of $400 million, bringing the total adjusted loss on automotive operations to $4 billion.

The automaker is taking steps, including $4-5 billion of U.S. credit lines and another $5 billion in asset sales and capital market activities, to raise cash flow it needs to keep operating through the end of 2009.

Recent reports have local Michigan politicians planning on lobbying the federal government to come to the aid of the struggling domestic automakers before it’s too late.

Regards,
OW

circlew

DETROIT - One would have to dig into the history books back to 1992 to find a worse month for car and truck sales in the U.S. than July.

The Seasonally Adjusted Annual Rate (SAAR) fell under 13 million vehicles - 12.55 million to be exact -- the lowest rate since the recession of the early 1990's. Of the Big Six automakers, only Nissan reported an increase in sales. Even Honda, which analysts had predicted would see an uptick, reported lower July sales. Detroit's Three slumped to their lowest combined market share -- 43.4 percent -- in history.

Notice the loss of "BIG" here.

<a href="http://www.autoobserver.com/2008/08/july-car-sales-worst-since-the-early-1990s-recession.html#more :sick:

Regards,
OW

62vetteefp

Great news! Here's some more.

Looking more like LLN around here. That is too bad.

circlew

GM is not the only one issuing LLN. BMW is hurting along with Toyota. Actually, Chrysler had some good news but left out some of the pain, Im sure.

I know the news is bad but the circle of life in the auto industry is at the bottom of the rotation. I look to the growth side when better products will be a requirement to prosper.

No pain, no gain. You can't borrow and not pay back forever.

Regards,
OW

Regards,
OW

fezo

Yeah, everybody is hurting at the minute.

The auto business is cyclical. Some of that can be solved with better product but mostly you just reach points where everybody more or less has a pretty newish car and the market dries for a bit. After a couple of years people are looking again. When you add people being scared about money right now and suddenly wanting what isn't being built it's really a mess.

Anyone that can hang on a year or two will be fine. I guess the question there is can all the makers hang on that long.

circlew

I guess the question there is can all the makers hang on that long.

Excellent question. Time alone will tell.

Regards,
OW

ehaase

It wouldn't surprise me if GM declares bankruptcy in 2010. After Chapter 11, it will come back as the Chevrolet Motor Company with 3 cars, a crossover, and a pickup truck - all made either in Korea, Mexico, or Latin America.

62vetteefp

http://www.detnews.com/apps/pbcs.dll/article?AID=/20080802/OPINION03/808020356/1- 148/AUTO01

Wagoner may be cut out just to sooth wall street. We will see.

No easy, cheap fix for GM's problems

Losing a numbing $15.5 billion in one quarter, as General Motors Corp. confirmed Friday, is a sure-fire way to restart the wailing.

Kill Buick and Pontiac.

Euthanize Saab.

Sue the directors.

Dump Rick Wagoner, GM chairman through some of the most transformative (and bleak) times in the company's 100-year history.

Blame the United Auto Workers and the clueless Detroit culture that didn't see $4-a-gallon gas coming (even if Japanese rivals Toyota and Nissan, the airlines and lots of others didn't, either).

However tempting some of these options may be -- and a few actually could happen -- the simple fact is that quick fixes for what ails GM right now aren't easy. Nor are they cheap for a company bleeding cash and trying to conserve every penny.

Soothe Wall Street? Its traders already have shown by their actions -- GM's market cap is a measly $5.79 billion compared with Toyota's $146.7 billion -- they believe the company to be essentially worthless despite its massive assets in the United States and its profitable operations overseas.

Force a company into shuttering brands? Doing so would be the automotive equivalent of the cure being worse than the disease by inviting a wave of litigation and requiring GM to write checks totaling at least a couple billion dollars to dealers protected by myriad state franchise laws.

Validate the critics who've assigned personal culpability to a complex series of business challenges, many of which cannot be controlled from atop the RenCen? Feed a press corps with the attention span of a kindergarten, which will then turn its attention to Bob Nardelli's meltdown at Chrysler LLC?

The point here is not to understate the gravity of GM's predicament because it is very grave. A company that burns cash at roughly the rate of $1 billion a month, reports a 30 percent drop in North American revenue in a single quarter, books a loss in its hot Asian operations and says its overriding objective is to maximize cash flow is a company that is fighting for survival.

I've covered GM for 12 years from three continents, seen its successes and failures, its smart moves (China and Korea), its less smart ones (Fiat) and a legit renaissance in the quality and looks of its cars and trucks. Through it all has been one constant: GM can't muster much of any momentum in its home market, and when things go wrong, they go really wrong.

The truth is that everyone in the business is getting whacked by record oil prices and the consumer's turn away from pickups and SUVs to smaller cars and crossovers. But no one is getting hit harder and destroying more shareholder value than GM, whose stock closed Friday at $10.23, down a staggering 76.3 percent from its 52-week high of $43.20 in October.

Is steering the General clear of federal bankruptcy court the only test of accountability for Wagoner & Co. -- beyond cutting bonuses, that is? GM's directors are scheduled to meet Monday evening and Tuesday, their first since June, in what is likely to be the first in a series of fairly dramatic board meetings over the next 60 to 90 days.

If GM's financials worsen, oil prices spike higher, credit conditions worsen, the automaker's cash hoard slips appreciably south of $20 billion and the company draws heavily on its revolving credit lines, pressure will intensify on the directors to act. It won't matter how broadly they may support Wagoner, President Fritz Henderson and their strategy.

That's business. That's how corporate directors can behave -- arguably must behave -- when sustainably crappy business results quickly merge fiduciary responsibility with personal liability and directors start showing up at board meetings with their lawyers in tow.

The more immediate question: What are you gonna' do about it, GM? It was telling that Henderson opened Friday morning's 90-minute conference call with a reprise of the automaker's two-week-old plan to raise $15 billion through $10 billion in "self-help" cost cutting and $5 billion in asset sales and financing.

"This is a game about rebuilding our revenue base," Henderson said. "It is what it is."

Yes, it is. And it's ugly.

circlew

I agree need to revamp at the Exec. level who are ultimately responsible for vision and results from the strategy decsisions. It is what it is is correct. No smoke and mirrors left.

You live by the sword...

GM is not in this alone by any stretch.

Regards,
OW

62vetteefp

http://www.detnews.com/apps/pbcs.dll/article?AID=/20080804/AUTO01/808040378

Ford, GM explore joint engines
Ailing automakers look to save costs of developing powertrains
Bryce G. Hoffman / The Detroit News
General Motors Corp. and Ford Motor Co. are discussing a possible collaboration to develop new engines and other powertrain technologies, according to sources at both companies.

The rival automakers are keen to find ways to reduce research-and-development costs even as they struggle to respond to a dramatic shift in consumer demand from big trucks and sport utility vehicles toward smaller, more economical cars and crossovers.

A deal could give Ford access to GM's Volt technology -- if it becomes commercially viable. It could also help GM offset cuts to its product development budget.

Advertisement
GM first approached Ford more than a month ago, two sources familiar with the situation said. GM told Ford that it was willing to discuss a wide range of possible collaborations.

GM's overture drew a mixed reaction inside Ford. Some executives felt that previous joint projects had benefited GM more than they had Ford, but others -- including Ford's global product development chief, Derrick Kuzak -- saw it as an opportunity to leverage some of GM's technology while at the same time reducing Ford's own development costs.

The matter went to Ford's board of directors last month, which voted to authorize negotiations with GM.

Since then, there have been at least three meetings between the two companies involving Barb Samardzich, Ford's head of powertrain operations, and her counterpart at GM. No agreements have been reached, but the talks were characterized as promising.

Neither company would confirm or deny the reports. GM spokesman Tom Wilkinson said his company does "not comment on speculation about future products or product development."

Ford spokesman Said Deep said Ford is concentrating on bringing its fuel-efficient European platforms to North America, but did not rule out working with another manufacturer.

"Our focus and greatest opportunity is to create 'One Ford,' and we're doing that leveraging our own global assets," he said. "(But) we're always open to talking to others in the industry. Beyond that, we're not going to comment."

Success worth replicating
Powertrains are the logical focus of any collaboration, say insiders in both companies.

Engines and transmissions represent a huge portion of the development cost of a new car or truck, yet they are not immediately obvious to the consumer in the way that a new navigation system or body design is. Developing an entirely new engine can cost $1 billion. Splitting those costs with another car company can save an automaker $500 million. A new transmission can easily cost $800 million -- or $400 million if the development costs are split.

Moreover, the onboard computers that control these components have a lot to do with how they operate, controlling things like shift timing and acceleration. Each automaker could create distinctive driving experiences using the same underlying components.

Such a move would not be unprecedented.

Ford and GM successfully collaborated on the development of a fuel-saving six-speed transmission that is rapidly becoming the backbone of both companies' powertrain lineup. Kuzak has pointed to the success of that program internally as something worth replicating.

Word of a possible collaboration between GM and Ford came as little surprise to analyst Jim Hall of 2953 Analytics LLP. Following the completion of the six-speed transmission tie-up two years ago, he gave GM CEO Rick Wagoner and other senior executives a presentation demonstrating the benefits of working with Ford on other powertrain technologies. He remains convinced that it represents a real opportunity for both companies to control research-and-development costs while accelerating the introduction of new, more fuel-efficient cars and trucks.

"The transmission deal has worked well for both companies," Hall said. "I told them, 'Don't stop there.'"

He said GM is ahead of Ford on four-cylinder engine development, but added that GM could learn a lot from Ford about combining turbo-charging and direct injection -- the technologies behind its EcoBoost technology, which promises to deliver more power and better fuel economy.

Electric technology useful
Then there is Volt, GM's promised vehicle that runs primarily on electricity.

While it remains to be seen whether GM will succeed in bringing it to market, Ford is reportedly keen on getting access to the technology if it does. And Hall said that is something GM should welcome.

"I would think that would be part of it and, if GM is smart, they will proliferate Volt technology," he said.

Doing so would provide GM with much needed revenue while at the same time reducing its own piece-cost for Volt components. It would be a way for GM to create economies of scale not possible with its own products alone, and would ultimately reduce the cost of such technology for consumers.

"Ford has more experience in getting the costs down, and that could really help GM," Hall said

circlew

Perhaps a deal should go a lot farther than that...combining companies could provide a platform for a much stronger turnaround than going it separately.

Just a thought.

Regards,
OW

62vetteefp

Perhaps a deal should go a lot farther than that...combining companies could provide a platform for a much stronger turnaround than going it separately.

There would be very little gain for either by combining. Both have too much truck capacity and it would only make it worse. Ford really has nothing that GM would even want that I can think of. Sharing an engine or tranny could cut the cost for both and that would not effect market share and increase profit for both.

nippononly

But is this a good deal for GM? They are years into the development of the Volt, and they would be essentially giving all that work away to Ford, in exchange for help with costs from here on out?

I was beginning to think that if GM managed to bring the Volt to market on time, it would be the final nail in Ford's coffin.