On 10th of October 2002, General Motors and Ford announced their joint venture scheme in which they would carry out the design, engineering and testing of their products jointly and that they would be working jointly with their suppliers. The announcement is basically made to make people aware of the new areas the two companies are going to tap jointly. The technological advancement is mentioned in the product attributes as well as the theme of environmental care that is propagated very well in the release as it announces that the joint technology would reduce fuel consumption by 4 to 8%.
The signing of MOU by the two giant automakers have opened new avenues for mergers and joint ventures in the filed of technology. This release also gives way to the economies of scale that would be met in this competitive arena and that sharing of technology would enhance their capability in the market. This has a specific message for other player of automobiles, and poses a threat for them. These two companies shall be able to reduce their costs and in the long run end up having greater profits than others have. This sharing of resources is no doubt the beginning of sharing of profits, which the giants have realized.
Also the innovation that drives the two companies is exhibited well in a news release as they intend to be the most innovative and quality conscious company taking care of the increased cost of production and bringing down the cost by economies of scale obtained by this collaboration. This jest is a very clever one in the sense that it not only provides information to the enthusiastic investors but also to the existing shareholders, who would now be willing to invest in the shares of the two firms simultaneously. Thus the purpose of gaining the attention of the investors and the shareholders is also fulfilled. Also as the environmental activists are becoming more conscious of the engineering designs that make for the heavy fuel consumption are also catered.
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This announcement does not only address the investors, shareholders and environmentalists, but also the loyal customers for whom the fuel economy is a great challenge. By making the “6-speed transmission”, the customers would be able to save fuel and thus would be attracted by their products. The matter of competition is however grave. As both would be technology and quality driven, the only thing that lies is with the outer look of their products. Another type of customer group is the sports guy for whom the speed matters.
The message is also intended for the suppliers that would be shared between the two firms. That would mean the survival of the fittest. The feedback would be shared and the demands would be almost same.
At the end of the release we can also see that there is a brief introduction of both General Motors and the Ford, stating that the first one is the world’s largest automobile manufacturer and the latter is the second largest automobile manufacturer. It also gives the information of the products manufactured by both the companies and the site information. This makes the reader believe what they say that they would capture the market and rule the industry by their dynamic move and technological innovation. It would thus be hard for the competitors to follow the move. But the announcement that it would be in the market by mid of this decade is amusing. As there would be a lot of technological advancements by that time.
News release: October 10, 2002, GM, Ford Join Forces to Develop All-New Fuel-Efficient Transmission
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