Words: Nile Bijoux

The news of Renault and FCA kicking off merger discussions looks to have shaken a few foundations in the automotive industry. With manufacturers looking to reduce expenditure and increase fiscal efficiency, it seems more are looking at partnering up. The latest pairing? Rumours of a General Motors and Ford tie-up.

While die hard fans of either camp will no doubt vehemently oppose the collaboration, it makes sense for these companies. Ford is getting ruthless with cost cutting, dropping some 7000 white collar jobs recently and setting savings targets of $US14 billion by 2023. CEO Jim Hacket also said the company will invest $11b to have 40 new electric and hybrid cars on the road by 2022. Not many are confident Hacket and Ford will achieve this goal as it appears that, currently, Ford is lagging behind the competition.

Meanwhile, GM is doing well in both the electric car and autonomous car areas. It is also selling plenty of vehicles in the lucrative Chinese market, notching up 813,973 sales there (including those of its joint venture partners) in the first quarter of 2019. On its home soil, GM leads the sales charts.

So what would each brand gain from a merger? Ford would get access to GM’s electric and autonomous know-how, as well as a greater slice of the Chinese market. On the other hand, GM could further improve its electric development through Ford’s tie-up with VW. It would also inherit Ford’s saving grace, the F-150 truck.

A merger would save each company billions on platforms and let them better compete with Toyota, VW and the potential Renault/FCA combo. VW might have words about the Americans joining forces though.