Diane E. Malone
MBA502 – Economics and Competitive Strategies
August 10, 2010
Eat or Be Eaten: Mergers and Acquisitions in the Automotive Industry
If there is one company that comes to mind when you mention the words “merger” and
“acquisition”, to me it is General Motors. As a child, I used to enjoy educating adults about their
'American' GM cars. I would explain that in fact GM was originally a German sewing machine
and bicycle manufacturer owned by Adam Opel (General Motors' first 100 years, 2008).
However, adults did not enjoy hearing a six year old girl tell the truth, when you 'know' you
bought an American car! Sorry all of you who thought GM was and is all-American, its genesis
was German and most of its acquisitions over the years have been anything but 'American'.
What is an 'American Car' anyway? In todays, yes, ‘global economy’, there has not been a car
designed and created from tires to wires on American soil since before WW II. We have been
outsourcing engineering, “part creation”, and assembly; to countries such as: Japan, Mexico,
Germany, England and others ever since! “Wake up” is all I can say. It is truly ignorant to
believe that your Ford (GM) Mustang was made here in the United States, today. They are over
60% Japanese and that is being kind. If the assembly sticker says ‘Ohio’, the fact is a majority of
the “guts” in the machine was made overseas; mostly in China, Mexico, Japan and others.
Back to the issue at hand, GM has made a career out of eating up car companies who are
floundering on the beach; much like a Great White shark eats baby sea lions in the shallows.
Sure, they started by making Oldsmobile's, Chevy's, Pontiacs, Buicks and even Sherman tanks
for WWII in Detroit and Flint Michigan (General Motors' first 100 years, 2008). The more “cushy”
Cadillac, which continues to sell for a lot more money than other GM cars, is just another GM.
Caddy's just have a 'better' suspension and more fluff in the seats and more 'make-up' to make
them look more expensive than their cousins. Not many people know all GM cars were
discontinued during the war to make room for making tanks, machine guns, ammo, and the like