VW, Ford join forces as world carmakers struggle
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Volkswagen AG and Ford Motor Co yesterday set an alliance on commercial vans and pickups and said they were exploring expanding into joint development of electric and self-driving technology, actions meant to save the automakers billions of dollars.
Ford and VW announced their partnership against the backdrop of the Detroit auto show.
The new partnership will start with sales of vans and medium-sized pickups in 2022.
It will not involve a merger or equity stakes, the companies said.
The two automakers explored closer cooperation as trade frictions force carmakers to rethink where they build vehicles for Europe, the United States and China.
The expanding alliance highlights the growing pressure on all global automakers to manage the costs of developing electric and self-driving vehicles, as well as technology required to meet tougher emissions standards for millions of internal combustion vehicles they will sell in the years to come.
Slowdowns in the world’s largest auto markets — China and the United States — have ratcheted up the pressure to cut costs.
In June 2018, Ford and VW revealed talks about an alliance in commercial vehicles and added they were looking at other joint projects.
Executives with both companies have talked about the potential savings of a deeper alliance.
VW officials have talked openly about building their vehicles in Ford plants and Ford has talked about using the German automaker’s electric vehicle platform.
The tie-up with Volkswagen is a big bet for Ford Chief Executive Jim Hackett who took over in May 2017 from the ousted Mark Fields with the mandate to speed up decision-making and cut costs.
Some analysts and investors have been frustrated by Ford’s laggard stock price and a perceived lack of details from Hackett about the Dearborn, Michigan-based automaker’s US$11 billion restructuring.
Last week, Ford said it would cut thousands of jobs, discontinue building money-losing vehicles and look at closing plants as part of a turnaround effort for its unprofitable European business.
On Monday, Volkswagen said it would invest US$800 million to build an electric vehicle plant in Chattanooga, Tennessee.
The move prompted US President Donald Trump to congratulate the city and state in a post on Twitter the following day.
But the White House has been pushing to end subsidies on electric vehicles that would help the plant and the alliance.
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