Ford, VW alliance may create the cars of the future

Ford and Volkswagen announced a long-anticipated plan Tuesday to build vehicles together.The automake...

Posted: Jan 15, 2019 6:13 PM
Updated: Jan 15, 2019 6:13 PM

Ford and Volkswagen announced a long-anticipated plan Tuesday to build vehicles together.

The automakers said they have signed an agreement to develop commercial vans and medium-sized pickups beginning as early as 2022.

Companies

Volkswagen AG

Automotive industry

Business and industry sectors

Business, economy and trade

Company activities and management

Ford Motor Co

Product development

Product innovation

Product management

Automakers and manufacturing

Bill Ford

Business figures

Motor vehicles

Self-driving cars

Technology

The companies also agreed to "investigate" how they can work together to develop next generation vehicles, such as electric and self-driving cars.

Both companies also said they were open to considering additional vehicle programs in the future.

The auto industry is racing to develop new technologies and vehicles. Companies are looking for ways to free up billions of dollars to spend on development.

Ford has said it anticipates spending $11 billion restructuring its business in the coming years, while VW has announced that it will spend €44 billion ($50 billion) by 2023 on an "electric offensive" to develop electric cars, self-driving vehicles and other new technology.

"You can't do this alone," said Ford CEO Jim Hackett at a joint appearance Tuesday. "All these efforts will be enhanced by sharing brainpower."

"It is no secret that our industry is undergoing fundamental change, resulting from widespread electrification, ever stricter emission regulation, digitization, the shift towards autonomous driving, and not least changing customer preferences," said Volkswagen CEO Herbert Diess. "In such an environment, it just makes sense to share investment, pool innovation capabilities and create scale effects in clearly defined areas."

While the two companies will share some production plans, Hackett said he does not anticipate any work force reduction in any Ford plants as a result of this alliance.

The two companies have been transparent about their talks, which began early last year. The automakers complement each other fairly well.

Volkswagen sold a record 10.8 million vehicles last year, making it one of the largest automakers in the world. But only about 1% of those are electric vehicles.

It does have a strong business in minivans, but not commercial vans or pickups. Ford brings strength in those areas. It also has only a sliver of the US market, the world's No. 2 car market behind China. VW also owns the luxury car brand Audi, as well as Porsche and Skoda,

Ford is a major player in the US market, second only to GM in terms of sales. But it is not as successful overseas It struggles to make a profit in Europe where VW is dominant. Ford has a very strong lineup of pickup trucks and SUVs. Its F-150 ihas been the best selling US vehicle for more than 40 years. But is essentially dropping traditional sedan sales in the United States in the coming years, while VW is still very strong in sedans.

Both have limitations on how close an alliance they can form. A formal merger was always unlikely, if not impossible, because of the unique nature of each company's ownership structures.

Two classes of stock at Ford give the descendants of founder Henry Ford effective control of the automaker. His great-grandson, Bill Ford Jr., is the current chairman of the company and it's clear the Ford family is unwilling to give up that control. Volkswagen has about 20% of its shares owned by the German state of Lower Saxony, where it is based.

Analysts expressed some disappointment during the call because the two sides weren't ready to announce a more definitive agreement on electric and self-driving cars. The two company chiefs assured them that they are moving in that direction, but that it's not as simple to work out the details as it appears from the outside.

"It's hugely complex. It's really tough job," said Diess about a decision on electrics and self-driving cars.

"This is a new world in how people work together," said Hackett. "We fully expect, Herbert and I, for these [talks] to be very successful."

Indiana Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 34574

Reported Deaths: 2134
CountyConfirmedDeaths
Marion9853578
Lake3616190
Allen161869
Cass15877
Elkhart132228
St. Joseph127434
Hendricks116971
Hamilton115993
Johnson1105108
Madison58659
Porter53928
Bartholomew51135
Clark50441
LaPorte43323
Howard40828
Tippecanoe4023
Jackson3891
Delaware38537
Shelby37322
Hancock33827
Floyd31839
Boone31535
Morgan27724
Vanderburgh2742
Montgomery24117
White2358
Noble23221
Clinton2321
Decatur22431
Grant21122
Dubois1993
Harrison19422
Henry18211
Greene16924
Vigo1698
Dearborn16821
Monroe16612
Warrick16628
Lawrence16324
Miami1401
Putnam1377
Kosciusko1351
Jennings1304
Orange12822
Scott1203
Franklin1108
Ripley1096
Marshall1082
Carroll932
Daviess8816
Steuben832
Wayne825
LaGrange812
Wabash782
Newton7810
Fayette777
Jasper671
Washington521
Jay520
Clay511
Fulton491
Rush472
Randolph473
Pulaski460
Jefferson451
Whitley423
Starke393
DeKalb371
Sullivan361
Owen351
Brown331
Perry330
Wells320
Benton300
Huntington282
Knox280
Tipton251
Blackford252
Crawford240
Fountain212
Switzerland200
Spencer201
Parke180
Gibson172
Posey160
Adams151
Ohio130
Warren121
Martin110
Vermillion100
Union90
Pike60
Unassigned0167
West Lafayette
Overcast
71° wxIcon
Hi: 76° Lo: 64°
Feels Like: 71°
Kokomo
Clear
70° wxIcon
Hi: 73° Lo: 62°
Feels Like: 70°
Rensselaer
Overcast
70° wxIcon
Hi: 73° Lo: 63°
Feels Like: 70°
Fowler
Overcast
70° wxIcon
Hi: 74° Lo: 63°
Feels Like: 70°
Williamsport
Overcast
70° wxIcon
Hi: 76° Lo: 63°
Feels Like: 70°
Crawfordsville
Scattered Clouds
68° wxIcon
Hi: 74° Lo: 63°
Feels Like: 68°
Frankfort
Overcast
73° wxIcon
Hi: 74° Lo: 63°
Feels Like: 73°
Delphi
Broken Clouds
71° wxIcon
Hi: 74° Lo: 63°
Feels Like: 71°
Monticello
Broken Clouds
71° wxIcon
Hi: 73° Lo: 62°
Feels Like: 71°
Logansport
Overcast
70° wxIcon
Hi: 74° Lo: 61°
Feels Like: 70°
Mild Today, Much Warmer Weather Tomorrow.
WLFI Radar
WLFI Temps
WLFI Planner

COVID-19 Important links and resources

As the spread of COVID-19, or as it's more commonly known as the coronavirus continues, this page will serve as your one-stop for the resources you need to stay informed and to keep you and your family safe. CLICK HERE

Closings related to the prevention of the COVID-19 can be found on our Closings page.

Community Events