Blog: Dave LeggettMatch-making

Dave Leggett | 19 September 2006

I've been mulling some of the current consolidation issues with colleagues today and a number of points, questions have been raised that I will share here.

1. GM and Ford in alliance/merger
That certain conversations have happened isn't too surprising. If everything else is apparently in the pot as a possibility why not this one? Only thing is, these two American corporations are so head-to-head there would have to be massive rationalisation. This scenario would surely have to be a last throw of the dice when both makers are staring down the barrel of a gun at Chapter 11 and it is seen as the best/only way to keep a viable all-American full-line manufacturer - able to punch its weight globally - going.

Like the occasionally vaunted coming together of Renault and PSA - it would be a tough pill to swallow. But don't rule it out if things in Detroit get worse rather than better. For now, the focus is on the respective turnaround plans.

2. AB Volvo - looking on impassively?
There are two firms potentially in play that might have got some attention over in Gothenburg at AB Volvo, home of Volvo Truck. Volvo once planned merger with Scania that was overuled as anti-competitive by the EU Commission. Does it just sit on the sidelines as the next round of commercial vehicles industrial consolidation involving Scania takes place? I wonder if the legal department at AB Volvo has been dusting down those Scania/EU Commission files for further consideration?

The other firm of interest to AB Volvo is Volvo Cars, which it divested to Ford in 1998. Ford has been a largely good home and the unit has been very successful in maintaining its independence and positive Volvo brand values. It is something for Swedes to feel quietly satisfied about and even, maybe, proud of (a more positive experience than GM's custody of Saab, anyway). Volvo Cars is still very Swedish and has been largely left alone by Ford while it turned a profit. So, how would AB Volvo's shareholders feel about Volvo Cars going to a new owner, especially if there was a suspicion that the new owner is after quick bucks and doesn't care much for the Volvo brand?

Could Volvo Cars find itself 'going home' - AB Volvo perhaps taking a majority shareholding, Ford keeping a sizeable stake? AB Volvo recently said it was condidering acquisitions in order to raise profits (see here).  

3. Need for Ford to be wary of bogus interest in PAG brands

It's kind of obvious and I'm sure there are people at Ford wise to this sort of thing, but some vehicle manufacturers might like nothing more than to send a small army of accountants and engineers into parts of PAG under the guise of due diligence, or 'preliminary investigations prior to makiing a formal bid'. I'll name no names.

US: Ford, GM talk possible alliance - report


Colossal China powers on

I'm starting to get a small idea of the scale of things here in China, but really, I'm only scratching the surface of this vast country....


China Hot Pot

Given the startling complexity of obtaining a journalist visa for China - the code 'J2' is now indelibly stamped on my mind - it was with some surprise how swiftly I managed to sail through airport im...

Forgot your password?