The question I'm contemplating today is this equation:
(1 company in trouble) + (1 company in trouble) = (1 company not in trouble)
General Motors has been shedding brand names as too expensive to maintain. It has yet to get a grasp either on product design/development or manufacturing to the extent that its large rival Toyota has. The Chrysler part of Daimler Chrysler is underperforming. So, where lies the "synergy" or "economy of scale" that comes with a union of the two? Would such a merger simply eliminate a competitor?
On the other hand, I've written several times about not making linear extrapolations from the past performance of companies to predict the future. Airbus is laying off 10,000 people and Boeing is thriving. Four years ago all the "experts" that are quoted in "main stream media" were saying last rites for Boeing and preparing for the burial. So, don't overlook the potential for a turnaround. Maybe the Toyota threat is just what GM needs to get the competitive juices going. Back when I played competitive tennis, I really only could do well playing from behind. In chess, I like playing black. When I'm behind, then I concentrate wonderfully. We can only hope that the same can be said for GM's senior management.
10:47:25 AM 
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