GM-Ford Deal Seems OK

However daunting, the transmission development deal that unites the world's two largest auto makers does not appear to cross the line into anti-trust territory, the Federal Trade Commission tells WAW.

“It is not an anti-trust violation, or even near so, for two groups to get together and use mutual resources and then go off on their own to produce (product),” an FTC spokeswoman says after General Motors Corp. and Ford Motor Co. shock the industry by announcing a joint venture to develop a 6-speed automatic transmission.

The auto makers have signed off on power flow, proof-of-concept and an initial production design. Using the same basic architecture, each company then will add elements to match brand character and vehicle program needs.

The FTC does not require detailed reports of such agreements — unless they contain an asset transfer component, such as share swapping or capital acquisitions.

Had the auto makers developed transmissions independently, they would have incurred costs “in the hundreds of millions,” says Tom Stephens, group vice president-GM Powertrain.

The deal was about 10 months in the making. GM made the first move: Stephens reportedly contacted Ford President and COO Nick Scheele directly. The two sides had been working on 6-speed transmissions of their own, but settled on a GM-inspired design because the No.1 auto maker “was a couple of months ahead,” Stephens tells reporters.

The transmission will debut by late-decade in large front-wheel-drive passenger cars and cross/utility vehicles or SUVs. Each auto maker will build the transmission in its own plants.