Column: GM, Hyundai hook up in New York — where will relationship end up?

We just saw some really big news — or maybe not — from a pair of global auto giants, and the whole thing has me in a New York state of mind. My head is swirling with thoughts of Carlos Tavares, my days at Bloomberg News and celebrity hand-holding at the U.S. Open,

Less than a week after the Trilateral Executive Dialogue — don't call it a TED Talk — in Seoul, among government and industry leaders from the U.S., Japan and South Korea, the top brass of General Motors and Hyundai Motor Co. met in New York to sign a memorandum of understanding to commit to discussing the possibility of exploring the potential for contemplating the consideration of future collaborations.

OK, OK. It wasn't quite that qualified. But to be sure, not much is actually happening right now: No money is being pledged, no product is being announced. Perhaps nothing at all will come of it.

Still, the potential is undeniably huge.

The companies said they are looking at options across virtually every mainstream automotive product in which they compete: Passenger vehicles and commercial vehicles, internal combustion engines, electric power and hydrogen. I'm half-surprised the release didn't mention robotaxis, lunar rovers or urban aircraft. But if they're talking about all of their core products, it could lead to talks about the more far-out stuff ... as well as moves that could tie the companies together in a more permanent way.

Learning of this agreement, I was brought back to a meeting this spring in New York with Stellantis CEO Carlos Tavares.

He warned of a coming shakeout in the auto industry that would see many players go away or be gobbled up — ending with a global industry of as few as five major players.

Tavares naturally counted Stellantis among the survivors. Presumably Tesla and BYD would be in a future industry powered largely if not exclusively by electric vehicles. If Tavares' hypothesis is correct, that would leave a dwindling number of seats remaining for Toyota, Volkswagen, GM, Ford, Hyundai, Nissan, Honda and the rest.

It made me suspect that — like late Fiat Chrysler Automobiles CEO Sergio Marchionne — Tavares dreamed of adding the Ford or GM truck (and sports car) businesses to the Ram and Jeep lines of the former Chrysler Corp., which are now among the many, many brands of Stellantis.

For at least as long as I've been covering this industry in Detroit, observers have contemplated the combinations of automakers that could be most formidable. I can't even count the number of times I've batted down rumors of a Ford-Honda merger. Typically, the preferred recipe in this parlor game is some pairing of U.S. body-on-frame truck expertise with an Asian (or European) small- and midsize car and crossover specialist.

To that end, a GM-Hyundai pairing could be a spectacular fit and give each the scale to go toe-to-toe with Toyota and Volkswagen.

It's still amazing that GM — after emerging from its 2009 bankruptcy with a more humble and disciplined approach — went from the biggest company in the world to the 25th biggest in America, according to Fortune magazine's annual ranking.

But that's where we are: GM and Hyundai combined make about 10 million vehicles a year, on par with Toyota or the VW Group.

While the lineups are complementary, it isn't clear how they can help each other with the biggest challenge the industry is facing: The transition to electric power.

Scale is important, but GM says it is on the brink of making money — at least on a marginal basis — from its EVs, and Hyundai already claims such a success.

Maybe GM needs a new partner for smaller EVs after Honda decided to go its own way in pursuit of affordable electric cars (perhaps in partnership with Nissan Motor Co. and Mitsubishi Motors Corp.).

How a partnership could work is not clear, but it seems like a smart thing to have some conversations.

Before I came to Automotive News, I spent a decade at Bloomberg News, mostly leading coverage of auto and transportation companies. Joining the financial wire service as GM and Chrysler were hurtling toward bankruptcy, it was an exciting and challenging time. With so much debt held by the Detroit 3, there was intense interest in their fate — and what it would mean to bondholders.

But as intense as that coverage was, the most important beat at Bloomberg — and presumably Reuters and The Wall Street Journal — was mergers and acquisitions.

They are the stories that reshape industries most rapidly and dramatically. Often a once-powerful CEO ends up without a job. Sometimes a new name is invented, such as Stellantis, or a phrase gets coined that later carries a sardonic tone, such as "merger of equals."

It's tough work for the reporters and editors on those teams because deals are secret until they are announced.

It's hard to know which rumors are based in fact and which are just speculation, wishful thinking or deliberate misinformation. After the fact, many deals can seem obvious; beforehand, they might seem unthinkable.

The deals you hear about don't always work out. But as a journalist, you don't want to be the last to recognize what might be happening.

I missed a lot of the U.S. Open tennis tournament this year, thanks to a dispute between DirecTV and Disney, which owns the ESPN brand and its many channels.

But I did get to watch ABC's broadcast of the men's finals in New York's Arthur Ashe Stadium. Among the celebrities taking in Jannik Sinner's straight set win over American Taylor Fritz were none other than superstar Taylor Swift and Kansas City Chiefs tight end Travis Kelce.

When word started to get out about the two of them — about a year ago, I guess — there were plenty of cynics on social media speculating it was just a publicity stunt or otherwise wasn't real.

I would never presume to know what their relationship is like. But here we are in September 2024, and they're out in public holding hands.

Will we see GM and Hyundai leaders side-by-side again, committing to a major project in a year or two? Could there be capital commingling? Nothing can be ruled out, nor can it be assumed.

"It comes down to reality, and it's fine with me," the piano guy wrote.

It's fine with me, too. But I'd be a little more comfortable if I knew which reality is really real.

You may email Jamie Butters at [email protected].