Ford-Toyota Sitdown Sets Tongues Wagging

Word of a sitdown between Ford's Alan Mulally and Toyota Chairman Fujio Cho, first reported yesterday in Japan's Nihon Keizai Shimbun newspaper, has the auto industry buzzing. Ford President/CEO Mulally, who took the helm last September, is looking hard for ways to bail out the flailing auto maker — and with Toyota edging past GM to become the world's top car company, it was apparently time for a little chat.

The question is, what did they chat about?

According to the Wall Street Journal [subscription required]:

Industry observers consider a takeover unlikely because of the problems plaguing the Dearborn, Michigan, auto maker as well as the Ford family's control of the company. Still, word of the meeting comes amid sweeping changes in the global auto industry, and talks involving purchasing alliances and technology-sharing agreements have proliferated as auto makers grapple with rising competition and global overcapacity.

Takeover or no, the two had plenty to discuss, from Toyota's "lean manufacturing" approach — which Mulally studied while heading up Boeing's commercial aircraft division — to Ford's plan to foreground fuel-efficient vehicles in its fleet — including gasoline-electric hybrids like Toyota's Prius, which Cho championed. (In fact, Ford and Toyota license gas-electric hybrid technology from each other.)

Speculation aside, Ford is in crisis mode. With huge losses expected for the year, the company is trying to cut its North American factory work force (now at 82,000) in half, streamline manufacturing, and shorten development time for new vehicles. In the meantime, $24 billion in new financing keeps the company afloat.

[Source: Wall Street Journal]