What Time Is It? Merger Time!

February 19, 2007
Article Image

It's only been hours since the news broke that GM and Chrysler may be exploring a merger - and mere minutes since XM and Sirius announced they're going to pair up to fight off the likes of HD radio and Apple's iPod.

But both mergers have been on the radar of business pubs and insiders for much longer. That's because in both cases, the only way to go is down.

Take the case of satellite radio first. When they bowed a few years back, both Sirius and XM planned on steady growth of subscribers who would gladly flee over-the-air radio and abandon their CD players for a stream of crystal-clear audio and personalities like Oprah and Howard Stern. The problem? XM's growth slowed in the past year, and Sirius' massive spending for talent hasn't mattered much. The combined companies will have about 14 million subscribers, and even though their hardware is standard in more and more vehicles, they're fighting the still-strong iPod and the growing threat of high-definition radio just to stay alive. Stay tuned.

Meanwhile, in Detroit, the steady deflation of America's auto brands has finally made Chrysler small enough and GM antsy enough to consider a merger. The basics sound ridiculous - the companies compete directly in so many markets, the Detroit papers are imagining a layoff massacre should it happen -- but on second glance, the reasons shape up. GM is out of minivans - Chrysler controls the domestic market. Both companies make trucks, and combined, they would easily outpace Ford's F-Series, not to mention Tundra and Titan. Jeep is tarnished but still a gem. And as a whole, Chrysler would bring smaller pension obligations than GM's own workforce and would put the company far, far beyond Toyota as the world's leader in passenger vehicles.

Stranger things have happened in Detroit. But just months ago, publisher Paul and I were talking about the potential for a GM-Ford merger because, it was assumed, Chrysler was off the table. These days in Michigan, nothing is sacred - surely for worse, but maybe for the better, too.

The Car Connection
See the winners »
The Car Connection
Commenting is closed for this article
Ratings and Reviews
Rate and review your car for The Car Connection
Review your car
The Car Connection Daily Headlines
I agree to receive emails from The Car Connection. I understand that I can unsubscribe at any time. Privacy Policy.
Thank you! Please check your email for confirmation.