If GM and let’s say Chrysler mereged what would happen to the industry and our economy? What about merging with another competitor such as ford or toyota?
The combined company would be stronger in the market, but it would form a monopoly in the auto industry.At this point in time that is good for the industry and economy. Once the market stabilizes it could be devastating for their competitors.
The combined company would be stronger in the market, but it would form a monopoly in the auto industry.At this point in time that is good for the industry and economy. Once the market stabilizes it could be devastating for their competitors.
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Assuming that the merger of the two companies was successful (clearly not a trivial assumption, just look at Daimler-Chrysler and their marriage and breakup), then the US would be left with a healthier company. In the short-medium term, their would be reconciliation of plant facilities and manufacturing, probably some dealer realignment (there are too many) and job losses, which would also involve significant negotiations with the affected unions. This could leave a much healthier single company in the short term. However, if the underlying issues of their current non-competitiveness (arrogance, lack of touch with customers needs, union contracts, poor dealers, lower quality cars than Toyota, Honda etc) aren’t resolved, the combination will be no better off than the separate entities. I believe that the Japanese, Korean and European competition is sufficiently entrenched here that there would not be monopoly issues. Ford is still around and GM is no longer the world’s largest auto maker (Toyota). The local economies of the ‘winning’ plant location would be bolstered. There would be some losers, as well.
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