Vehicle Company "VW and Ford" to Announce their Partnership Alliance to save Billions of Dollars

Volkswagen (VW) and Ford are expected to unveil an alliance on Tuesday that combines forces on commercial vehicles and is likely to expand into joint development of electric and self-driving technology, moves meant to save the car makers billions of dollars.

Volkswagen CEO Herbert Diess announced a partnership with Ford on Monday. Picture: VOLKSWAGEN GROUP

Ford and Volkswagen will announce their partnership against the backdrop of the North American International Auto Show (Detroit Auto Show), Volkswagen CEO Herbert Diess told reporters on Monday.

In recent months, the companies have discussed co-operating in vans and other commercial vehicles, and have said that any expanded alliance would not involve a merger or equity stakes.

They have scheduled a joint conference call at 1.30pm GMT to provide an update on the status of the proposed collaboration.

The two car makers have been exploring closer co-operation as trade frictions force car makers to rethink where they build vehicles for Europe, the US and China. The expanding alliance highlights the growing pressure on all global car makers 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 automotive markets — China and the US — have ratcheted up the pressure to cut costs. The scope of the Volkswagen-Ford alliance was still being determined ahead of the show as talks covered co-operation in the area of electric and autonomous cars.

The framework of the alliance is expected to include the pooling of resources in autonomous technology and VW investing in that part of the Ford business, and Ford licensing VW’s MEB electric vehicles platform, sources have said.

Volkswagen’s Diess confirmed at the show on Monday that the alliance will include Volkswagen gaining access to Ford’s mid-sized Ranger pick-up truck platform. In June 2018, Ford and Volkswagen 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, and VW officials have talked openly about building their vehicles in Ford plants, and Ford using VW’s electric vehicle platform.

The tie-up with Volkswagen serves as a big bet for Ford CEO Jim Hackett since he 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 Ford’s $11bn 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.

• Reuters