What if Ford and General Motors merged? The result would be a global automotive machine so inconceivably huge rivals like Toyota and Volkswagen might not even think of challenging it. And it would be awash with cash, and profits, cutting tremendous expenses at both automaker from research and development all the way to accounting. At least this was the plan proposed by General Motors CEO Rick Wagoner in a private meeting with Ford executives in the summer of 2008.
This shocking revelation is the latest to come from New York Times auto writer Bill Vlasic, in an except from his new book ‘Once Upon a Car: The Fall and Resurrection of America’s Big Three Automakers — G.M., Ford and Chrysler’, set to be published tomorrow.
Seeing it for the desperate move it was with GM out of cash and burning through one billion dollars a month, Ford Chairman Bill Ford and Chief Executive Alan Mulally flatly rejected Wagoner’s appeal. Later on, Wagoner even admitted he understood why. “But sitting in their shoes, I could understand why they didn’t want to do it,” he said.
The rest, they say, is history, with GM filing bankrupcty protection papers and then emerging from the complex process having slashed $48 billion in debt and obligations, able to once again generate a profit without looming debt payments eating up all its cash.
Yet as shocking as this news is, implications from the book may have more lasting effects. “There was something missing among Mr. Wagoner, Mr. Lutz and Mr. Henderson [CFO], some chemistry or cover-my-back mentality,” writes Vlasic, undermining the leadership at GM, which has been brought into question before. “They worked together, but not ‘together,’ as the Ford guys did.”
Published by William Morrow ”Once Upon a Car: The Fall and Resurrection of America’s Big Three Automakers — G.M., Ford and Chrysler’ is on sale October 4th.