Why oil companies should buy car manufacturers

The Sunday Times ^ | February 03, 2006 | Jason Dawe

[NonValueAdded]

Why would a successful oil company want to buy a health and pension manufacturer who makes cars as a hobby?

[Paradox]

The slightly bizarre part of the whole equation is that while oil producers are making record profits, one of their biggest customers, the automotive industry, is on its knees. News this week revealed that Ford had once again made a loss, this time $1.6 billion (£901 million), in its North American operation in 2005. At the same time they revealed that they plan to cut another 30,000 jobs and shut 14 plants by 2012. And just a few days earlier General Motors announced a loss of $5 billion (£2.8 billion) in North America for the same period and an $8.6 billion (£4.8 billion) loss on global sales.

Is the automotive business really on its knees? Or is it just Ford and GM. Is it true that fewer cars are being sold, or is it that GM and Ford are losing customers to the other manufacturers?

[Teacher317]

Oil companies buying car companies may sound like a preposterous idea today, but if they continue to make such huge profits they are going to have to find something to spend all of their profits on.

Silly article. As if all profits go to the corporation and the share-holders don't exist. As if corporations don't think about reinvenstment, or alternative competitive industries especially in the face of rampant concerted efforts to promote alternatives instead of their products.

[tx_eggman]

RDS (Shell) made $25 billion on the year and will invest $19 billion next year. They are finishing up a JV with China for a new refinery ... Shell's part ... $4.5 billion. If you want them to keep finding and supplying hydrocarbons they've got to profit from it.

Exxon made 10.7% profit, Microsoft made over 30%, Merck made over 25%. Why should an oil company be punished just because it's business is an order of magnitude larger than a software or pharmaceutical company?

[308MBR]

Cool idea. Maybe the day will come again when we can buy some fully prepped race cars at the dealership, specifically modern cars with the concept of the Ford Thunderbolt, Hemi Darts, and ZL-1 Camaros.

[uglybiker]

...but when the numbers start to get this large it still feels a tad excessive.

I gots sometin' excessive he can feel!

[QQQQ]

And forget about economy cars. The more gas car uses,the more $$$ oil co. will make in the future.

[308MBR]

Trying to compete on the low end of the market is a LOT of the problems with the domestic manufacturers. Not only do these cars not use as much fuel, but there is little profit in making them due to the competition cutting each other's throats racing to the bottom of the barrel.

As an example, Ford should be making Mustangs, GT-40s, the pickup/SUV line, and Crown Vics. Nothing else is needed.

[opinionator]

If this were to happen I am sure that the result would look like the computer printer industry.

The cars would be cheap but thay would get about 5 mpg and the cost of gas would skyrocket.

[ovrtaxt]

I wouldn't touch a car company with my worst enemie's ten foot pole. Who wants all that union pension responsibility?

The oil companies should start their own car company, union free, if they want to get into the business. Which I doubt.

[ovrtaxt]

As an example, Ford should be making Mustangs, GT-40s, the pickup/SUV line, and Crown Vics. Nothing else is needed.

They can't. They are mandated to produce a cerrtain quantity of miles per gallon across the board in their production run.

In other words, they can only produce so many SUVs as long as they also produce a certain quantity of low mpg cars to offset the fuel consumption of their entire line.

You can thank DC for that.

[R.W.Ratikal]

Because U. S. laws don't allow vertical ownership.

Be careful what you ask for, you might get it. If the oil companies owned the car companies we would be getting gas mileage of 2 to 3 miles per gallon.

[dalereed]

"I am sure that the result would look like the computer printer industry"

Quit using a stupid ink jet printer and buy a lazer.

I just yesterday changed the toner csrtrage on my HP-6P after 5 years of using it daily at a total cost of $32.96.

10 years ago it cost over $600 but has never had any service and is now starting on it's 3rd cartrage, super cheap at the price and never problem.

[ClaireSolt]

These profits won't last. Just watch Hugo Chavez discounting oil to make friends as a harbinger of what is coming. Copmpetition.

[308MBR]

I can thank DC for a LOT of things like that. How long do you think that CAFE would last if the oil companies bought GM and Ford?

[TheOracleAtLilac]

I believe that the mfgr can pay penalty $'s for the C.A.F.E. that falls below the car or truck mandate.

I.E. how does Ferrari comply? - $'s

[Leisler]

One group of lefties,Feel good trust fund environmentalist, sticking it to another group, union workers. When ever I tell union workers that, I get the double blink wood burning smell experience. Usually though, they go into Democrat suicide reset mode and continue on as if nothing happened.

[ovrtaxt]

CAFE needs to go, the oil companies need lots of competition, and they need the freedom do drill wherever they can afford to buy the lease. Plus, alternative technologies need to be developed.

Let the free market decide what's profitable. If I want to buy a 2006 muscle car with a 429 Hemi, I should be able to. If I want to buy a solar powered mini-bike, that's my prerogative.

The government needs to completely butt out, except to break up monopolies like OPEC.

[reg45]

We bought an HP 5P just over ten years ago. It cost $900, we have put about five toner cartridges through it, but it is still going strong.