Toyota Denies Negotiations With Ford

By: Jay Stevens

Toyota Motor Corp. Chairman Fujio Cho met with Ford Motor Co. CEO Alan Mulally. However, the automaker claimed that it did not discuss the possibility of any alliance with Ford. Tomomi Imai, Toyota's spokesperson said, "It was just a get-acquainted meeting." He further added, "Toyota's top executives constantly meet with counterparts at other automakers."

Analysts have previously expressed their skepticism about the rumored outright or even substantial merger of the two auto giants. Erich Merkle, IRN analyst said "I don't think you're looking at any kind of alliance here. You have to ask yourself what would be in it for Toyota. They're doing pretty well on their own."

Even though several analysts are skeptical about the joint venture or merger, there is still no shortage of issues involving the two. This year is full of extremes for both Ford and Toyota. It can be recalled that Toyota knocked Ford off its perch as the top 2 automaker in America. Also, Toyota also announced that it would be building more than 9.4 million vehicles for 2007. This may sound a threat to General Motor's reign as the largest automaker around the globe. In regard to Ford's standing, it is apparent that up until now it is experiencing significant sales drop and losses. Hence, critics speculate certain topics where Ford and Toyota could have discussed.

First possible topic could be auto parts and assembly plants. "What Ford needs right now is cash, and what they don't need is capacity. What Toyota could use is capacity, and what they don't need is cash," said James Womack, chairman of the Lean Enterprise Institute.

Another feasible topic is assets. Earlier, Ford said that it is willing to sell its Aston Martin sports car unit and work out deals on other assets like Jaguar. Moreover, the most feasible among the possible topics is auto technology. In 2004, Ford was given access to some of Toyota's hybrid patents. This is done in exchange for information on lean-burning engines.

Since then, Ford was absorbed in hybrid manufacture. This concentration led to the production of Escape, a small sport utility vehicle. assembly is inspired by Toyota's hybrid expertise. The latter has made the manufacture of hybrids a specialty. In fact, the market has shifted to fuel-efficient and environment-friendly vehicles to get more advantages.

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