Strategic Alliances, Collaboration and Joint Ventures Case Study

GM Ford Alliance: An Innovative Trend in Global Auto Industry

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Abstract:
Analysts viewed that the probable GM-Ford Alliance would be the biggest news to rock the global automobile industry since the invention of the automobile. GM and Ford tie-up was a distinct possibility that reflected in talks occurred between GM CFO Fritz Henderson and Ford CFO Don Leclair. As the report came as GM and Ford had been slashing their work forces and closing plants in efforts to reverse multibillion-dollar losses. Their sales also had been affected by competition from more fuel-efficient models from Asian automakers, like Toyota. This new initiatives became almost inevitable in this juncture, as opined by the management of both the companies. As both the companies were the industry leaders, analysts were skeptical whether this alliance would take place or not. Therefore, the challenges in front of both the companies were to make the alliance happen and thereafter to make the alliance work. This case deals with the challenges of forming such alliance, how Ford and GM strategies to make the alliance, overcome the challenges and can leverage the alliance as a part of their turnaround exercises.

Pedagogical Objectives:

• To understand the rationale behind a possible alliance between the two global auto giants
• To get an overview of the global automobile industry
• To discuss how an alliance would help the companies strengthen their positions
• To debate whether such an alliance, if formed, would work.

Keywords : Mergers,Acquisitions,Alliances Case Study;GM (General Motors); Ford; Alliance; Global auto industry; Innovative trend; Detroit; Fordism; Auto manufacturer; Rick Wagoner; Automotive News; Lay-off; Rationale of alliance; Merger; Toyota; Honda

Contents : 
Industry Overview
GM-Ford Alliance Talk
The Rationale of the Alliance
Reaction of Market
GM’s Financial Highlights for 2003-2005
Plants scheduled to close under the planned GM restructing program
Financial Results of Ford
World’s Top Nine Automaker Company in terms of Production
GM and Ford losing Ground Vis-à-vis Toyota