Thursday, August 24, 2006

Ford Nissan Deal a Sham

If you haven't been paying too much attention to the automotive news lately, you wouldn't have noticed talks about a possible platform/engine/transmission merger between GM and Nissan/Renault. GM CEO Rick Wagoner wanted absolutely nothing to do with this if you believe DeLorenzo at, and I tend to agree. I also agree with him that Jack Kerkorian is trying way to hard to control the outcome of the company considering that he owns only a small share of GM. I also agree with DeLorenzo that this might be a some smoke and mirrors trick move for Carlos Ghosn, Nissan/Renault's CEO, to get a chance to take on his next "project", conveniently getting away from Nissan/Renault right before the shit hits the fan(see reliability/quality issues).

So what is this I see on only a couple of hours ago? What is this bogus story that Bill Ford has been speaking with Carlos Ghosn on a merger between the two? This is the biggest bunch of hogwash I have seen in automotive news reporting that I have seen yet. Let me list the reasons why:

1. Mazda. In case you did not know, FoMoCo owns a third of Mazda. Ford and Mazda do share a lot of joint platforms because of this partnership. Examples?

A. The Ford Fusion/Mercury Milan/Lincoln Zephyr are all built off of the highly successful Mazda 6 platform. This platform was developed by Mazda.

B. The new Ford Edge was built off of the highly touted Mazda CX-7 platform.

C. The next generation Ford Focus(already available in Europe) is built off of the highly successful Mazda 3 platform, the fastest selling compact in the class. The Volvo S40(Ford also owns Volvo) is built off of the Mazda 3 platform.

In addition, Mazda supplies many engines for Ford, and vice versa. The 3.0L 6 cylinder Duratec in the Mazda Tribute, the Mazda MPV, the Mazda 6 and the Mazda truck, is built by Ford. I am not too crazy about the engine, but it gets the job done effectively enough. The 2.3L 4 cylinder MZR engine which has just received an increase in orders and is incredibly reliable, is built by Mazda in Japan. This motor can be found in many Ford products, too many to name.

So? Well, what does Ford need from Nissan that they don't already get from Mazda on a platform/engine/transmission line? There would be no "synergy benefits" that I can foresee coming from a merger. None. Especially when Nissan is experiencing a problem with quality and reliability and Mazda is not.

2. Ford doesn't have the same problems that GM does, plain and simple. Although sales in Ford are down, they still have the number one selling vehicle in the country(see the F series pickup truck). They also have a lot of great products in the pipeline. True, GM has some nice products on their lots, Ford just doesn't have financial problems that are looming and anywhere near as threatening. Ford doesn't have to worry about legacy bennies, current bennies, severance packages, strikes, job cuts and billion dollar yearly losses. Ford isn't nearly as reviled by the "Drive By Media" as GM is(more on this in a bit).

3. Nissan has nothing to offer. Nothing. We went over the platforms, engines, and transmissions that Mazda offers. We haven't touched on manufacturing as much, and I realize that. This is where Nissan may help us in North America as they have more plants here than Mazda does. Only three Mazdas are manufactured in the USA in harmony with FoMoCo. Although a small number in terms of platform, all three are high volume platforms in either Mazda, Ford or both.

The Tribute built in harmony with the Ford Escape, isn't a huge seller for Mazda, but it's sibling, the Escape, is a big seller for Ford.

The Mazda 6 is built in harmony with the Ford Fusion/Mercury Milan/Lincoln Zephyr. Although the three latter aren't as big sellers as predicted, they have only been in the market less than a full model year. The 6 on the other hand sells very well for Mazda and has received over 100 international awards alone.

Finally, Mazda's B series truck and the Ford Ranger are built in harmony in the US. Of the two siblings, the Ford out sells the Mazda at about 5 or 6 to one. Not the best, but what does Nissan bring to the table that Mazda doesn't in the truck category, the Frontier? Ha.

So, overall, why? Why is the merger bullshit? Why is the merger smoke and mirrors technique? We touched on it before, and we will again. This is the "Drive By Media" fabricating and blowing up a story 500 times larger than it actually is. This is Jack Kerkorian leaning on his buddies in SoCal to help him get his way. This is a wannabe small hostile takeover and a chance to make GM look bad. This is the media trying to create something to pressure Wagoner to fall. "Look! Look! Ford is interested, why aren't you Rick?!" It's a bunch of crap. Plain and simple. If you read enough about the automotive industry as I do, you would know there is just as much slant in the "reporting" as there is in the political arena. And, as Peter DeLorenzo would say, you can pretty much count on all this hogwash getting filed at ""


At 5:18 PM, Blogger Neo-Con Tastic said...


Dude, where's my car?

At 5:34 PM, Blogger Disgruntled Car Salesman said...

I don't know dude, where's my deposit check.

At 5:51 AM, Blogger Dad29 said...


You claim that FoMoCo has no "legacy" bennies problem.

Did the UAW quit Ford while nobody was looking?

The story may be crapola, but Ford will be paying bennies and retirements under the UAW agreements. Maybe Bill Ford has a 5-year projection that makes FoMoCo's P&L look like GM's does now...

At 10:18 PM, Anonymous Car People said...

Love the comeback: dude, where's my deposit check!


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