Ford bets on global partnerships to cut costs: report
27 Sep 2018
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US automaker Ford Motor Co is engaged in talks with Germany’s Volkswagen AG and India’s Mahindra about expanding product and technology alliances as it strives to cut costs and stay trim.
A Reuters report quoting Ford Motor Co CEO Jim Hackett said the company plans to implement measures to restructure its business in order to secure costs savings in partnership with other similarly placed auto makers..
The plan involves deepening partnerships with other automakers around the world to share factory floor capacity and develop vehicles together, Hackett told of 300 Ford executives at its headquarters in Michigan during a global leadership meeting.
Ford is reported to be already in discussions with Volkswagen on how to expand a commercial vehicle tie-up they previously announced to include collaboration in South America and Europe - where Ford is losing money - and co-develop other types of vehicles.
The Reuters report quoted Pablo Di Si, chief executive for Volkswagen in Latin America, as saying that the companies are studying a partnership in Brazil and the talks are “advancing positively.”
The report said an expanded alliance would give Volkswagen access to some of Ford’s most profitable vehicles, including the Transit commercial vans and Ranger compact pickup trucks.
Alternatively, VW could help Ford strengthen its money-losing South American and European operations by combining vehicle production in those markets, the report said.
Meanwhile, Ford is also in product sharing talks with Mahindra & Mahindra, including using the Indian automaker as a benchmark to bring down supplier costs in the region, reports said, adding, the first vehicle from joint platform will likely be launched in 2020.
Ford needs to remain profitable while it is investing billions of dollars to develop electric and self-driving vehicles, and gearing up for a major roll out of products over the next two years.
Hackett is harping on sharing product development costs to remain profitable as automakers strive to stay in business. It will help Ford reduce the number of different vehicles it builds and shrink engineering and purchasing costs, according to the company.
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