‘No rules’ are now the norm

The new rule of the global automotive order is that there are no rules.

The latest evidence: An Indian automaker, Tata Motors Ltd., is in exclusive negotiations to buy Britain’s Jaguar and Land Rover brands from Ford Motor Co., though formal confirmation of the talks is not likely until early next year, a source familiar with the situation tells me.

"For now, it’s a one-on-one situation trying to get a deal worked out. There are no multi-lateral negotiations" with other would-be buyers — including a private equity group headed by former Ford CEO Jacques Nasser — "going on."

The operative words, of course, are "for now." Things change with dizzying speed when the capital fueling an industry and its markets no longer is controlled only by the Americans and the Europeans in London, Paris and Frankfurt, but by the Chinese, the Russians, the Indians and oil sheiks in the Middle East, too.

And when the capital runs low, as it has in varying degrees at all three of Detroit’s automakers, commitments to brands and business strategies — long linked to the whims and biases of owners and top executives — are subject to change, sometimes with a stunning swiftness that can upend generations of perceived stability.

‘It’s a deal’ — until it isn’t

Ford is poised to peddle Jaguar and Land Rover to Indians instead of the hometown Brits because the deal is what matters, not domestic politics in Britain. Ford wanted to shop Volvo Cars to raise cash and simplify the parent company’s management structure before it didn’t, thanks to a global credit crunch and better-than-expected progress on its North American restructuring.

Chrysler LLC pursues a subcompact car deal with China’s Chery Automobile Co., which would ship cars back to the United States. A prospective pact with GAZ, a Russian automaker essentially controlled by one of the country’s most prominent oligarchs, Oleg Deripaska, would green-light assembly of Jeep Grand Cherokees in Russia with Michigan-made parts.

And the Auburn Hills-based automaker is exploring vehicle cooperation possibilities with Carlos Ghosn’s Nissan Motor Co., meaning the French at Renault SA — the newest partner of Russia’s AvtoVAZ — may not be far behind. Ghosn is going to get a foothold in a traditional Detroit automaker; the only question is which one.

Whoever said politics makes strange bedfellows probably never envisioned the global auto business, circa 2008. No potential tie-up — at least for the Americans — is off limits in a quest to raise cash, reduce product development costs, gain new markets and position, or all of the above.

No rules, no guarantees

But as the U.S. economy appears headed for a pronounced slowdown next year, and as Detroit’s automakers furiously cut production in preparation, the new "no rules" order has a more ominous component: There are no guarantees, either, that Detroit will be home to independent American automakers.

A lesson of the Sept. 11 terrorist attacks is that Americans and their leaders suffered a "failure of imagination." A lesson of what’s happening to Detroit’s Big Three, to their industry, to their would-be partners, is failing to imagine a Ford not run from Dearborn or a GM not run from Detroit.

Fourteen years ago, when I arrived in Michigan, the state was awash in big-name companies — Kmart, Jacobson’s and Crowley’s in retail, Gerber, NBD, Standard Federal, Arbor Drugs, among many others — but they’re all gone. Or they were consolidated into rivals who long ago claimed their customers.

That’s what can happen when there are no rules, when the other guys have more dough, more room to maneuver and exploit opportunities instead of playing defense and hoping for the best.