You may or may not know that various car companies sometimes share knowledge, parts, and people to save money. For instance, Lotus uses Toyota engines, Hyundai’s Genesis Coupe has turbo motor shared with Mitsubishi, Nissan licenses hybrid technology from Toyota and is rumored to be working on a truck that is based on the Dodge Ram. Please understand none of these companies own each other. They are “independent.”
What Autoblog taught me that it isn’t just the engineering or production that companies borrow from each other. They invest in each other. It’s not simply something like Toyota owning a bit of Subaru and Porsche’s constant attempts to take over Volkswagen, car companies loan each other money too. This knowledge has emerged amid the Chrysler bankruptcy. When a big company goes down the pooper like this, companies that have loaned money by purchasing bonds (bondholders) must come to the court and make sure they are represented. The list of top creditors to Chrysler has popped up, and the results were simply astounding. The top creditor is…
“…Ohio Module, which is a subsidiary of Hyundai Mobis, which is in turn a publicly traded subsidiary of Hyundai. Ohio Module makes chassis for the Jeep Wrangler and Chrysler has run up a $70 million tab with [Ohio Module].”
Another creditor to Chrysler is Visteon, a spin off of Ford that still does most business with Ford. Another is Chrysler’s advertising agency; still further a former executive that has also worked for Ford & BMW, and just retired from a 7 year post at GM is listed as a bondholder.
It’s difficult to perceive how companies within an industry can successfully compete with each other when they are all working together. It comes as no surprise that the industry is still stuck on the internal combustion engine, struggles to get above 40 miles per gallon, and has yet to create any new technologies of world changing significance. Doing any of these things would risk upsetting your bondholders, shareholders, or vendors.
This is an absolute mess And it’s not just Chrysler. Everyone in the automotive industry is in bed with each other. This is why last year the different companies all came together in Washington and said that if one goes down the others will suffer too. They’ve created a little web of interdependence that is going to take years to unravel. And it’s going to be unraveled on the taxpayer’s dime.