Tuesday, April 20, 1999
GM-Toyota link start of merger?
Giants herald technology deal
The Associated Press
DETROIT — The No. 2 executive at General Motors Corp. hinted Monday that a new technology partnership between GM and Toyota Motor Corp. could lead to a broader linkup of the automakers.
A merged GM and Toyota would account for more than one-quarter of the world's car and truck sales, but GM Vice Chairman Harry Pearce stopped short of predicting a deal.
“It would certainly be premature to talk about a merger,” Mr. Pearce said in an interview. “But I think it's important for both companies to have a very open mind in terms of where this kind of collaboration takes us.”
Mr. Pearce's provocative comment came after he and Toyota Vice President Akihiro Wada announced a five-year deal to jointly research and develop alternative-fuel vehicles. Mr. Pearce said both sides expected the venture to last well beyond five years as “a long-term and continuing collaboration.”
A spokesman for Toyota Motor Manufacturing North America, Toyota's Erlanger, Ky., manufacturing headquarters, said it was too early to say what the research partnership would mean for Toyota's manufacturing operations there, which recently announced a $15 million expansion.
With the new service parts distribution center under construction in Hebron, Ky., Toyota's employment in Greater Cincinnati will exceed 1,500. It also employs more than 7,500 at its Georgetown, Ky., manufacturing complex.
GM is the world's largest automaker; Japan's Toyota is ranked third, behind Ford Motor Co. Mr. Pearce said their joint efforts in advanced technology research would give them a tremendous competitive advantage. He said he hoped it would lead to joint production of nonpolluting vehicles.
David Cole, who directs the University of Michigan's Office for the Study of Automotive Transportation, said a GM-Toyota merger seems un likely because of the antitrust issues.
The GM-Toyota research will initially focus on vehicles powered by fuel cells, batteries and hybrid propulsion systems that combine different technologies, such as electric motors and high-efficiency gasoline engines. Fuel cells generate electricity using a chemical reaction between hydrogen and oxygen and produce little or no emissions. So far they are too expensive for mass-production cars.
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