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I've heard the prospect of GM and Ford merging a few times over the past few weeks:

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One of the laziest management answers to shrinking market share is merging with competitors - it's usually a recipe for both entities collapsing. Both companies know what products they need to pursue, and if they are pulling out all the stops to get there, they will go out of business.
 

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I read a report GM lost 39 billion dollars last year, car sales are down all over the US, I wonder why, duh, do you think it might be gas cars might not be worth much in the future. I think what would save GM if they slow down on gas car production and mass produce the Volt, but they won't listen to me.
 

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m&m,

The bulk of the $39 billion was paper losses on assets, etc. GM actually had tens of billions in the bank.

The fact is, it will take automakers a decade to convert their fleets over to hybrids, BEV's and FCV's, so the entire industry will be hurting for a few years. After that, everything will be gravy, as it will be cheaper to operate our vehicles, and the air will be clean.
 

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The bulk of the $39 billion was paper losses on assets, etc. GM actually had tens of billions in the bank.
That's what Roger Smith used to claim when announcing multi billion dollar losses. Once he was out and forensic accounting started, it was revealed that not only were the losses real - they were understated. Twice in the past two decades GM nearly went bankrupt, and has seen its stock fall from blue chip to junk status.

From the article currently running on the main page of this site:

"It’s glaringly clear that GM (and Ford and Chrysler) have rapidly slid into serious financial peril. Revenues have depended heavily on trucks and SUVs. The current oil price spike has fundamentally and profoundly shifted consumer behavior across the boards. People have abruptly stopped buying SUVs and trucks in favor of small fuel efficient cars (or no new car at all)."


Remember, if you have 80 billion in the bank and lose 39 billion, you can still claim to have tens of billions in the bank.
 

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I don't see much value in the two of them merging, but as suggested by comments on one of Lyles recent posts they should consider collaborating. Sharing and co-developing high efficiency technologies like hybrids, EREVs, and super efficient ICEs does make a lot of sense to share costs and reduce time to market.

Both companies, and Chrysler too, need to shift as much of their production to their more economical and efficient cars in each segment post haste. The also need to push all development programs that address these needs with a life or death sense of urgency.
 

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GM Can Avoid Two Years of Weak Sales

I read a report GM lost 39 billion dollars last year, car sales are down all over the US, I wonder why, duh, do you think it might be gas cars might not be worth much in the future. I think what would save GM if they slow down on gas car production and mass produce the Volt, but they won't listen to me.
I don't think it's feasible to get the Volt into mass production in a short time, but at the 1998 Detroit Auto Show, GM showed a 40-mile series-hybrid prototype of the EV1 (and that was a production car and I bet they still have all the drawings, assembly procedures etc), so if they took some of that $50 billion cash on hand that Jason's article talked about and bought back the Nickel-metal hydride battery rights from Chevron, we could see plug-in EV1's in the showroom next summer. So Merle, if you know someone at GM, try pushing this formula and see what they say.
 
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