Sunday, June 17, 2007

Buyouts and Mergers

There was one rather tidy rumor that came out of Steve Matchett’s (F1 commentator for Speed TV) mouth during practice for the Canadian Grand Prix. Apparently, Matchett tells us that if Toyota doesn’t see a change in its results within most probably the next two years, it will buy out the Williams operation and work from England, where most F1 engineers choose to reside.

All this would fit into Toyota F1’s business plan considering that the manufacturer has never had a problem before in making the right decisions towards efficiency and productivity. That is to say, they have run the Formula 1 operation on their own, and have now possibly seen that changes
need to be made as to how they run their F1 operation.

Economically speaking, I see this all the time with mergers, buy outs, and acquisitions occurring quite often. For a modern firm to see in its analysis that it can run, or be run, more efficiently in another manner is nothing new. All they need to find is a willing partner that can provide the synergies necessary to make a successful operation.

Toyota now already uses a gearbox from the Williams F1 team. I await the suggestions of other possible synergies and cost saving measures.

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