GM's staggering $15 billion loss in the second quarter is the kind of event that may send the automaker into the arms of Ford to make "sweet, sweet engine collaboration love."
GM's staggering $15 billion loss in the second quarter is the kind of event that may send the automaker into the arms of Ford to make "sweet, sweet engine collaboration love."On Monday, The Detroit News reported that GM and Ford are in talks to collaborate on the development of fuel-efficient engines and powertrain technologies:
A deal could give Ford access to GM's Volt technology -- if it becomes commercially viable. It could also help GM offset cuts to its product development budget.
Doing so would provide GM with much needed revenue while at the same time reducing its own piece-cost for Volt components. It would be a way for GM to create economies of scale not possible with its own products alone, and would ultimately reduce the cost of such technology for consumers.
In June of 2008, GM's board of directors voted to fund production of the Volt.
It wouldn't be the first time these two have tangoed. A couple of years ago they had a dalliance that produced a six-speed automatic transmission that was used in some Saturns, Fords, and Lincolns. "The payoff for both automakers was about a 40% savings in development costs," reported Wards Auto.
Ford, however, doesn't have what GM desperately needs right now -- battery technology to power its Volt hybrid, which is still only a concept car. Who does? "Right now GM is evaluating products from a company called A123, working with Continental, and a company called CPI working with LG Chem," says GM on its Volt FAQ page.
Maybe GM should be chatting up Tesla Motors. The young auto company started shipping its Roadster in July and its engineers are working on a (relatively) more affordable all-electric sedan for release in 2010. Tesla uses a proprietary lithium ion battery pack for its award-winning car. And since GM is shopping for a battery, these two might have something to talk about.
GM has a lot of work to do, and it needs to move fast. Truck and SUV sales are tanking. Hybrid sales are soaring, and consumers are clamoring for electric vehicles and hybrid plug-ins. But GM is at least two years away from getting its Chevy Volt concept car into production. If it's going to drive away from this mess, it's going to need all the help it can get -- even if that means rekindling old fires -- or starting new ones.
Check out my image gallery featuring GM's Chevy Volt concept car and Tesla Motors' all-electric production Roadster.
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