Herbert Diess (left) and Jim Hackett
The bosses of VW and Ford confirmed their alliance on Tuesday in Detroit.
DüsseldorfThe automobile companies Volkswagen and ford start with their global alliance, about which both companies had negotiated since the middle of last year. The two companies definitely want to jointly produce vans, pick-ups and light city delivery vehicles.
In addition, cooperation is also being negotiated on autonomous driving, electric drives and mobility services. That confirmed VW-Vorstandschef Herbert Diess and be ford– Jim Hackett on Tuesday in a joint conference call in Detroit.
Ford boss Hackett justified the start of the alliance with Volkswagen with the fundamental changes in the automobile industry by digitization and new drives. The entire industry is facing a “fundamental change”. A company like Ford could no longer handle these changes on its own.
The global alliance with Volkswagen is also an answer to new competitors, such as from the IT industry. However, the alliance, which started on Tuesday, was just a start. “There is still a lot of work ahead of us,” emphasized Hackett.
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Similarly expressed VW CEO Diess. “In such an environment, it makes sense to share investments, pool innovation and create economies of scale in well-defined areas,” he said. Like Ford boss Hackett Diess called no sums that can be saved by the joint development and production of vehicles. In the middle of last year, Diess had talked about synergy effects in the commercial vehicle sector of 400 million euros per year.
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This is in the development of electric cars in the front line. No other automaker tackles the topic of electric mobility as sustainably as the VW Group. “By 2025, we want to become the world’s number one in e-mobility,” he said. Ford wants to benefit from this and could take over the electric platform MEB from Volkswagen.
This said that details are still being negotiated. Specifically, it is about whether Ford will take over the platform for own cars in China or Europe, but not in the United States,
In autonomous driving, Volkswagen wants to use the help of Ford and its subsidiary Argo, which focuses on the development of autonomous moving vehicles. “From the point of view of Volkswagen, cooperation with an American company in this area would be extremely useful.
Here, the US is significantly further than us in Europe, “said Diess. Also about it is still negotiating with Ford, results should be available during the year. A capital interdependence of both companies is not provided, emphasized both CEOs equally.
Together produced pick-ups are the first project of the already announced commercial vehicle cooperation. From 2022, Volkswagen is expected to discontinue its own pick-up production in Hanover and will only purchase these models from Ford. At the moment, the Amarok is still being produced in the Hanover transporter factory.
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As an American automaker, unlike Volkswagen, Ford has proven expertise in pick-ups. The VW group is likely its pick-ups of future generations Ford plants in South Africa and South America, then also produced on Ford platforms and with Ford engines.
2023 is the common transporter production of both auto companies begin. For this VW will relocate the production of part of its T-models (“Bulli”) in Ford plants in Turkey. Ford is primarily to produce the commercial vehicle variant for craft and trade, the Bulli as a passenger remains in Hanover.
The output gaps in the Hanoverian factory wants to fill VW with new electric vehicles, In turn, Volkswagen will also produce a city delivery van (“Caddy”) for Ford. The joint production facility is likely to be Volkswagen’s Polish commercial vehicle plant in Poznan.
Ford is in the end much more urgent than Volkswagen relies on the cooperation with the German partner. The operating return of Ford is a lot lower than that of Volkswagen: The US group is just over four percent, in Wolfsburg it is about three percentage points more. Even in the longer term, nothing will change that fast. As early as October, Ford has abandoned its requirement to achieve an operational return of eight percent by 2020.
The weak return hits Ford at a completely wrong time. In view of the enormous investments in billions for the electrification and the digitization of the Ford fleet, the US company would actually have to earn significantly more now. Although Ford is already trying to counteract, for example by focusing on SUVs and pick-ups in North America. Classic sedans are considered a discontinued model, Ford says goodbye.
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But even with such serious cuts Ford is not progressing decisively enough. Therefore, the cooperation with Volkswagen for the US group comes at the right moment: So if Americans could use the MEB electric platform for their own vehicles, for example, Ford would save billions.
Incidentally, Volkswagen is not the only cooperation partner with which the Americans negotiate. Ford is also holding discussions with the Indian manufacturer Mahindra about cooperation for the Southeast Asian region.
Ford suffers first from a total disparity in its returns. The shops in North America with large off-road vehicles and pick-ups are doing well there. In the third quarter, the US group has earned almost two billion dollars in the operating business there. If the comparatively good development in North America did not exist, then Ford would already have slipped into huge problems today.
Because in the rest of the world, Ford earns no more money. South America, Asia and Europe are all red. Even in China, Ford is losing money; the market, which is still considered a Dorado for the entire automotive industry today. For example, Volkswagen earns about four billion euros a year in China.
Europe is developing into a growing problem area for Ford. In the second quarter of this year, the US group lost $ 73 million on the European market. In the summer, the situation has worsened significantly again: For the third quarter, Ford already has a loss of 245 million euros in Europe. The US company is moving further and further away from the self-declared goal of a minimum return of six percent, which is, however, seen throughout the auto industry today as indispensable for survival. Ford has lost market share in Europe, especially in passenger cars, and relies on partners more than ever before.
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Should there be a hard Brexit the problems at Ford would be even bigger, Ford Europe has been comparatively strong on the UK and Germany concentrated. The US company relies on the free movement of goods between its English and German plants.
The basic relationship between Ford and Volkswagen is considered unproblematic. Participants speak of a good negotiating climate when both sides negotiate about the possible cooperation projects. The cooperation between the two car companies has a long tradition: there have been close partnerships between the two companies twice already.
Due to the then continuing economic crisis, Volkswagen and Ford had combined their business in Argentina and Brazil in a joint venture in the 80s and 90s under the name “Autolatina”. Production, distribution – all VW and Ford combined in Latin America under one roof. When the economic situation improved significantly in the mid-1990s, each of the two partners made their own way back to South America.
The cooperation in Latin America was a model for a smaller cooperation project in Europe. In the early 1990s, both companies decided to build a jointly operated car factory in Palmela, Portugal, not far from Lisbon. For nearly ten years, Volkswagen and Ford jointly produced large-capacity sedans, the VW Sharan and the Galaxy of the Americans. In the late 1990s, Ford decided to retire from Palmela, Volkswagen took over the factory completely.