World automakers need to look to their teamwork

World automakers need to look to their teamwork

DETROIT, Michigan (AFP): When John Devine joined the world's
largest automaker as chief financial officer in December, he
cheerfully predicted that General Motors Corp. would be one of
the few survivors in a consolidating industry.

"I think we're seeing an enormous change in this automotive
business around the world," said Devine, who spent all but one
year of his 33-year career at GM rival Ford Motor Co., before
joining GM.

"There's going to be an enormous separation, a sort-out of the
business. At the end of that time, there's going to be a few
winners and lots of losers."

Over the past decade six super-groups have emerged as the
dominant players in the global auto industry, according to
Michael Robinet, director of global forecasting at CSM Worldwide
in Northville, Michigan.

The Big Six -- US titans General Motors Corp., and Ford Motor
Co., Japan's Toyota Motor Corp, Germany's Volkswagen AG and
DaimlerChrysler AG, and France's Renault -- have buttressed their
position by swallowing up smaller competitors and forging
strategic alliances.

The rest of the industry, Robinet says, can be divided among
loners -- such as Japan's Honda, Germany's BMW and Porsche, and
France's Peugeot-Citroen, which appear strong enough to retain
their independence -- and problem children, such as Korea's
ailing Daewoo and Russia's Lada.

While auto sales hit a 17.4 million-vehicle American record in
the year 2000, sales and profits skidded so sharply toward the
end of the year that auto companies started slashing production
and have yet to stop.

Automakers also are hitting the brakes on European production,
and analysts say the most lucrative, highest-volume consumer
markets on both continents and Asia have stopped growing.

That means that to cut costs and continue growing, the strong
auto companies must continue eating the weak, either by gobbling
problem children whole or nipping off the best pieces.

Just as important as any further consolidation is the way in
which these operators manage their acquisitions and partnerships,
say industry analysts.

Ford has successfully maintained and even polished the
distinctive images and products of its acquisitions while sharing
chassis, parts, engineering and production methods across
continents.

"Ford in particular has done a great job with the automakers
that it's acquired," said Greg Salchow, industry analyst with
Roney et Co. brokerage house in Detroit.

"Being part of a large corporation, with its purchasing power
and engineering capabilities is really a good thing for a lot of
these lower-volume, niche manufacturers."

GM is slowly but surely sucking its Japanese and European
lines into its generic corporate blender.

"GM just kind of lumps them all together," said Scott Upham,
analyst with Providata Automotive in Ann Arbor, Michigan. "As a
whole, GM tends to want to pull everything into its center."

But DaimlerChrysler, industry analysts say, has kept the
Chrysler Group entirely separate from Mercedes-Benz, ignoring
opportunities to share engineering, best-practice production
techniques or parts the consumer does not see.

Ford has "bit the bullet, changed some of its production
systems, doing a relatively good job of platform-sharing,"
Robinet said. "Ford is going to weather this downturn better than
GM and (Daimler)Chrysler."