Ford, Volkswagen form global alliance; plans first car in 2022
16 Jan 2019
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Iconic US carmaker Ford Motor Co and German multinational Volkswagen have formed a global alliance for the development of new generation cars, including vans and pickup trucks.
The two automakers are also planning to jointly develop electric vehicles and autonomous vehicles as also mobility services as the two looks to cut costs and explore new markets.
The alliance does not involve the companies owning a stake in each other as was seen in the case of Renault and Nissan. Ford has a similar arrangement with Mahindra in India. Ford expects these alliances to help save costs of up to $25 billion in the next 3 to 5 years.
The alliance between Ford and Volkswagen was made known at the ongoing 2019 Detroit Motor Show.
Ford and Volkswagen will form a joint committee with equal representation to oversee the new developments.
Ford and Volkswagen have, in June last year, signed a memorandum of understanding to explore several joint projects, which also include the development of a range of commercial vehicles.
The two are expected to launch a medium size pickup truck in the US in 2022 as the first offering from the alliance. Volkswagen will build a smaller city van while Ford will design and build medium size pickups for companies and larger commercial vans for European customers.
"Over time, this alliance will help both companies create value and meet the needs of our customers and society," said Ford CEO Bob Hackett said. "It will not only drive significant efficiencies and help both companies improve their fitness, but also gives us the opportunity to collaborate on shaping the next era of mobility."
"Volkswagen and Ford will harness our collective resources, innovation capabilities and complementary market positions to even better serve millions of customers around the world," said CEO Herbert Diess. "At the same time, the alliance will be a cornerstone for our drive to improve competitiveness."
Earlier this week, Volkswagen said it would invest $800 million in an existing assembly plant in Chattanoga, Tennessee, a move the company said would create 1,000 new jobs and "make a contribution, step forward, to avoid tariffs between Europe and the U.S.", according to Diess.
Ford also, last week, said it will review its operations in Russia, combine its UK headquarters just outside of London and shutting a transmission plant in France as part of a regional overhaul aimed at turning its European operations into profit.
Ford also said job cuts in its 53,000-strong workforce would follow, but hoped "as far as possible" they would come through voluntary action.
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