Ford, GM reported to have discussed alliance

Senior executives at General Motors and Ford have discussed a merger or alliance, according to newspaper reports.

Senior executives at General Motors and Ford have discussed a merger or alliance, according to newspaper reports.

Citing several sources, industry newspaper Automotive Newsreported there were no ongoing talks between the two companies, however, and that it was not clear earlier discussions would bear fruit.

The Wall Street Journalsaid Ford and GM "briefly discussed" an alliance but had since dropped the idea with no plans for further talks.

GM and Ford declined comment.

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Analysts said GM and Ford might benefit from a limited partnership to share costly product development costs but questioned the logic of a full-blown merger.

Both companies are scrambling to roll out more fuel-efficient cars and car-based utility vehicles to reduce their reliance on sport-utility-vehicles and pickup trucks, which have emerged as the weakest part of the US car market.

Both Detroit-based firms are also burdened by high pension and health care costs and are working through complicated cost-savings plans involving the United Auto Workers union.

To further complicate matters, GM is already in the midst of a 90-day study of a potential tie-up with Nissan and Renault in which Nissan and Renault could buy up to a 20 per cent stake in GM.