Rumor has it, the company that put “America on Wheels” and the one which created the “People’s Car” will announce a major agreement next week. A Ford Beetle? A VW Ranger? How about a Golfstang? Don’t laugh just yet. The auto industry grew on mergers and acquisitions. Think way back to Ford purchasing Lincoln, or GM bringing in Cadillac and Oakland. For those of us who had to look it up, Oakland become Pontiac. In the mid-century the tradition continued as the independents struggled against the big and mighty three. Packard merged with Studebaker, a not so swell ending. But simultaneously, Nash merged with Hudson, formed AMC, added Jeep, and soldered through some good times and many bad. Sure, they’ve ended up a brand of FCA, but a mighty powerful one. Thinking about FCA, recalls the miserable DaimlerChrysler alliance, a miscue all around. Yet FCA continues forward, showing the Europeans and Americans can succeed together if the union is right.
Today’s market is rife with potential mergers and acquisitions. None with a bigger impact than the future of Tesla, a company with market value 30% greater than Ford and gaining on VW. But those actions are farther out. Let’s focus on next week’s announcement. How will Ford and VW work together to broker product and culture? Bang or bust? I’m betting on a bang, but with potential for backfires and broken parts scattered along the way. What do you think?