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The chief executives of Ford and Toyota, Alan R. Mulally and Fujio Cho, met in Tokyo last week for talks about the environment, hybrid car development and manufacturing efficiencies. Though there are no indications that the auto makers are considering joining forces, the meeting was reminiscent of the ultimately unproductive talks held this summer by GM, Renault and Nissan about possible joint ventures. Ford is suffering one of the worst periods in its history, while Toyota is surging toward the number-one position in auto manufacturing. It is currently the second-biggest car company in the world behind General Motors, which it should surpass within a year, and is expected to unseat Ford from its number-two position in the U.S. market in 2007. Toyota has licensed hybrid technology to Ford, though Ford has opted to place greater emphasis on "flexible fuel" vehicles that can run on both gas and other fuels. Mr. Mullaly has a longstanding familiarity with the Toyota Production System, which is designed to eliminate waste and improve production at every level of an assembly line. Mullaly put a modified version of that system into place at Boeing, where he ran the airplanes division prior to joining Ford.

• Sources: New York Times, Wall Street Journal, Reuters
• Related commentary: Toyota Versus GM/Ford: Classic Hedged Pair Trade, Ford's Internal Projections: Toyota Will Be #2 Within Months, Toyota Production Surges to Meet Global Demand, Toyota To Become World's Largest Automaker in '07, No Tough Times For Toyota. Conference call transcripts: Ford
• Potentially impacted stocks and ETFs: Ford Motor Co. (NYSE:F), Toyota Motor Corp. (NYSE:TM). Competitors: General Motors (NYSE:GM), DaimlerChrysler AG (DCX). ETFs: Rydex S&P 500 Pure Value (NYSEARCA:RPV), iShares Russell Midcap Value Index (NYSEARCA:IWS), BLDRS Asia 50 ADR Index (NASDAQ:ADRA), BLDRS Developed Markets 100 ADR Index (NASDAQ:ADRD), iShares NYSE Composite Index (NYSEARCA:NYC)

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Source: Heads of Ford and Toyota Meet in Tokyo