Analysts note that the car companies recently initiated talks about small partnerships, but each may be motivated to think big because of their limited product lines and limited regional scope. Wochit
One of the big stories at this week’s Detroit auto show won’t involve the unveiling of a new vehicle.
With Ford and Volkswagen executives and 5,000 credentialed automotive journalists in town this week, at least some details are expected to become known about the two automotive giants’ progress toward an alliance.
Here’s what we know so far:
Talks started in June
Ford and VW signed a Memorandum of Understanding to explore several joint projects, including, but not limited to, joint development of a range of commercial vehicles to better serve global markets. Both companies said they want to strengthen global competitiveness.
That appeared to quickly evolve to include discussions about collaborating on electric and autonomous vehicle research and development, extremely expensive, complex areas where automakers fear missing out on hundreds of billions in future revenue as transportation evolves.
Shared factories?
In December, VW’s CEO, Herbert Diess, said the company may expand its U.S. production presence beyond Chattanooga, Tennessee, by building products in underutilized Ford factories with UAW workers.
That would be a significant change — foreign automakers have avoided U.S. union labor other than a past General Motors-Toyota operation in California that now is the site of Tesla’s factory.
Hackett: Potential in Europe
Ford CEO Jim Hackett told Bloomberg TV during an interview Sunday that Ford would “never sell” the Ford brand, so leaving Europe has “never” been considered. But, he indicated, VW may build Ford-branded cars for Europe.
He said he is extremely unhappy with his company’s 2018 performance. “I want to tell you, I’m not happy about Ford’s performance” in 2018, Hackett said. “I mean, that should just be said.”
The former furniture company executive, who assumed leadership of Ford in May 2017, is leading job cuts and consolidation he calls “fitness,” including what’s expected to be thousands of jobs in Europe in a move announced last week.
“Being able to fund both the change in the old and the new is why I’ve thought about other partners to do that,” Hackett told Bloomberg. “We don’t have to sell Ford to do that, we don’t have to sell the brand to do that,” because competitors “can invest in like-minded technologies” with Ford.
Announcement Tuesday?
North American International Auto Show organizers have held a spot on this week’s media schedule for an unspecified “pending industry announcement” on Tuesday morning. Deutsche Presse-Agentur reported Friday that the Volkswagen board in Germany had approved “fundamental agreement on planned cooperation” with Ford, according to a Google translation of the German report.
Sources told the Free Press to expect the companies to announce a collaboration on commercial vans and midsize pickups initially, and to say they will continue reviewing opportunities to cooperate on electrification and driverless technology.
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No merger
Ford and VW have been consistently clear that any alliance will not be a merger, and the companies will not take ownership stakes in each other.
The companies complement each other in many regards, with VW strong in China, where Ford has consistently struggled and lost huge chunks of sales in 2018, and in Europe, where Ford losses money and last week announced major cuts. Ford, though, owns pickup sales and production, particularly in North America. VW has no trucks and lags in North America.
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