White Knight Syndrome

Looks like the gabbing over last week’s high-intrigue meeting between top Ford and Toyota executives has subsided going into New Year’s. Of course, the splash was big enough to register on Wall Street. The day the news broke wide States-side, Ford’s stock jumped 10 cents, or 1.4%, to $7.52 and it traded as high as $7.53 all well below the stock’s 52-week high of $9.48.

If the first day story was an excited “What if?,” the second day story was definitely a skeptical “Why ever would they?” as analysts dumped cold water on any possibility of a GM-Renault-Nissan style tie-up. The talks were most likely a play on Ford’s part to ensure its supply of hybrid power-trains in the near term.

In any case, if there was one easily diagnosed pathology in the auto industry this year, it was undoubtedly a serious case of white knight syndrome — the unrealistic desire for quick-fix solutions to complex, systemic problems.

Much of the hype around this summer’s GM-Renault-Nissan talks commonly ignored how long it would have taken the companies to begin working together profitably, not to mention pulling off co-production. The white heat of this week’s Ford-Toyota excitement only underscores how nearsighted speculation can be.

Reality is not so sexy. For each of the Big Three the road back to sustainable profitability is bound to be, at best, a long hard slog.

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