Last week's announcement about General Motors taking a 20 percent stake in Fiat and Fiat taking a 5 percent stake in GM is just the latest in the push for global consolidation. No one has the slightest idea where it will end, but one thing is certain: It isn't over, it's just the middle of the backstretch.
If the largest automobile manufacturer believes it's important to develop alliances with automakers in Europe and Asia, I would imagine that every other automaker must feel even more pressure to increase its affiliations with other manufacturers.
DaimlerChrysler has missed another opportunity. After deciding the timing wasn't right for an affiliation with Nissan, its attempt to acquire Fiat has been thwarted as well. Ford must feel strongly that it is necessary to create more affiliations or acquisitions even after its recent purchase of Volvo.
The companies that would appear to be takeover targets must see their worth and desirability increasing with every new deal.
It would appear all the world's automobile manufacturers have decided all the deals will be made within the next few years and if they don't take advantage of this small window, their opportunities will be lost forever.
Whether that's true remains to be seen, but it also is quite likely that there could be a further round of mergers and affiliations. The entire process could begin again in five or 10 years with consolidation, cost-cutting and management efficiencies the goals once again.
I am sure there are strong, valid reasons for bigness. But if one of the reasons for all these purchases is the potential for increased production and market share, I wonder where it will come from. We have millions of units of overcapacity today. It would seem natural to assume every merged entity will think it can sell more cars and trucks. There has to be a breaking point somewhere.
An interesting picture will evolve in the next decade as companies and individuals jockey for global supremacy and/or survival. Not all mergers are made in heaven and some could pull down both companies and make them ripe for the next takeover.
The desire to build a company into a gigantic corporate entity may well be irresistible. Like the moth attracted to the flame, that desire could lead to a corporation's eventual demise.
But today, the world is analyzing the GM-Fiat affiliation. Tomorrow, there will be another merger to report and dissect.