Posted on 10/10/2002 6:12:27 PM PDT by Willie Green
For education and discussion only. Not for commercial use.
DETROIT (AP) — The world's two largest automakers, General Motors Corp. and Ford Motor Co., said Thursday they will team up in a unique partnership to develop a new six-speed automatic transmission.
The two companies said the high-volume, front-wheel-drive transmission will offer an estimated 4 percent to 8 percent improved fuel economy over traditional four-speed transmissions in front-wheel-drive cars.
Ford and GM have signed an initial agreement and said they expect to finalize the deal this winter. Both automakers have been working independently on six-speed transmissions.
The two automakers now offer four-speed transmissions in their front-wheel-drive cars. The extra gears will provide smoother driving as well as better fuel efficiency, industry observers said.
``Ford and GM may be traditional competitors, but we share common goals of satisfying customers, improving fuel economy and reducing costs,'' said Thomas G. Stephens, group vice president for GM Powertrain. ``We believe partnering together on this program will provide significant benefits to our companies and our customers.''
The companies declined to discuss financial terms of the arrangement during a Thursday afternoon teleconference.
Under a memorandum of understanding signed last week, Ford and GM have agreed to cooperate on designing, engineering and testing the new transmission as well as working with suppliers to develop and buy components.
The companies will assemble the transmissions at their respective manufacturing plants.
``We'll each produce transmissions that are distinct in feel and performance,'' said David T. Szczupak, Ford's vice president of powertrain operations. ``That's because the transmissions will be mated to different engines and fitted to different vehicles.''
Analysts said Ford and GM have sold each other parts and had other minimal business relationships over the years, but this will mark the first time the two have joined on such a broad program.
``The way things are done now, each company spends hundreds of millions of dollars — maybe billions — developing transmissions independently,'' said David Healy of Burnham Securities Inc. ``If they can get away with doing it jointly without bothering the antitrust people in Washington, this makes a lot of sense.''
Ford spokesman Joe Koenig said attorneys for both automakers had studied federal regulations and ``we feel we're not going to have any antitrust issues.''
The companies said the new transmission is expected to be available ``beginning in mid-to-late decade'' for front-wheel-drive cars and sport utility vehicles.
Partnerships among automakers are not unique. For example, GM works with Isuzu on designing and building diesel engines, and DaimlerChrysler AG, Hyundai Motor Co. and Mitsubishi Motors Corp. said in May they were forming a joint venture to develop a family of in-line four-cylinder gasoline engines.
Asked if the Ford-GM arrangement was prompted by such competitive pressure, Stephens said, ``I'd say the motivating factor was trying to satisfy our customers and, to do that, we need to provide great products at the lowest possible cost.''
After watching their share prices slide in recent trading sessions amid concerns about sales and the economy, Ford and GM each rallied more than 6 percent Thursday. In trading on the New York Stock Exchange, Ford stock rose 45 cents to close at $7.60 while GM shares climbed $2.11 to $33.12.
``The way things are done now, each company spends hundreds of millions of dollars — maybe billions — developing transmissions independently,''Why does it take so much money to develop a transmission?
I don't work on trannies but I've seen the parts all laid out on a table with someone working on it.
Because you're trusting a securities "analyst" who favors oligopoly.
"Ford Taurus"
There's the tooling costs for production. Molds to make the parts, numerous production lines for different modules, production line workers training, not to mention the engineering the design to begin with. There's the testings to assure reliability and quality. Warranty and Liability.
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