Ford and General Motors Discuss Possible Merger – Industry Sources Say Negotiations Include Alliance

Ford and General Motors Discuss Possible Merger – Industry Sources Say Negotiations Include Alliance

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Ford and General Motors may be discussing a possible merger or alliance. Both companies have been hit by stiff competition from Toyota and other Japanese automakers forcing the two companies to lay off employees and trim production.

The industry publication, Automotive News, says that senior “executives at General Motors and Ford Motor Co. have discussed a merger or alliance, according to several sources familiar with the talks”. They add that the negotiations may not be fruitful, but it does appear the two companies are holding talks. One source told the agency that there is a “slim chance” that anything will come from the talks.

As a policy, the automakers do not discuss their negotiations with other automakers. Neither company is commenting on the stories.

An alliance could benefit both automakers, who compete against each other, plus compete against foreign manufacturers. As a result of these talks, they may only share costly product development costs as both companies work on newer more fuel efficient vehicles.

General Motors stock was down slightly to $31.48 a share from a previous closing of $31.66. Ford stock traded at $7.82, down almost 2 percent from its previous close of $8.02.

By Dan Wilson
Best Syndication Writer

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