Ford and Volkswagen (VW) today announced the formation of an alliance for the development and production of vehicles that they hope will give them a competitive advantage in the future against their rivals in the face of the radical transformation that the sector is experiencing.
Although the agreement announced today in Detroit by the company’s top executives concerns the development and production of medium-sized pickup trucks and vans, the two companies made it clear that their intention is to expand the alliance to the development of electric and autonomous vehicles. .
Both the CEO of Ford, Jim Hackett, and the VW, Herbert Diess, explained that new technologies mean large investments for all manufacturers and that sharing costs, and risks, is the smartest thing.
What Ford and VW have agreed to after months of negotiations is the signing of a memorandum of understanding to “investigate collaboration in autonomous vehicles, mobility services and electric vehicles.”
But Hackett insinuated during a teleconference with media and financial analysts that although the two manufacturers were not announcing today an agreement for the development of electric and autonomous vehicles, that does not mean that Ford and VW have not already reached it.
Hackett and Diess explained that there would be more news in the near future and that the two companies needed to reveal at this time the general aspects of the result of months of negotiations to inform their shareholders and the general public.
As revealed, starting in 2022 Ford and VW will jointly produce commercial vans and pickup trucks of medium size and that the financial benefits of that cooperation will be evident in 2023.
The directors of Ford and VW made it clear at various times during the conference call, which initially was to be a press conference at NAIAS, that the agreement does not involve an exchange of shares as was done with the alliance between Renault and Nissan.
Both Hackett and Diess explained that it is not the future goal that the two manufacturers acquire shares of the other and that they will remain as separate entities.
“Ford and Volkswagen will continue to operate as two separate and competing entities,” Hackett said.
Likewise, the vehicles resulting from the alliance will be marketed independently by each manufacturer, with their own brand and identity.
One of the products that the alliance will generate is a new “pickup” for South America, Europe and Africa that will replace the VW Amarok that the German brand sells in Latin America.
As indicated by Jim Farley, president of Ford Global Markets, who also participated in the teleconference, the manufacturer will be responsible for developing and producing the “pickup” that, in principle, will not be marketed in the United States.
Ford will also develop and produce large vans for the European market while VW will be responsible for the development of a smaller van for the urban environment.
The two manufacturers indicated that their intention is to produce the vehicles in the markets in which they will be sold. In the European case, Thomas Sedran, general director of commercial vehicles of VW, indicated that the production would be carried out in the plants that the manufacturer has in Poland or Turkey.
Sedran indicated that the goal of the alliance is to be “as competitive as possible” in terms of costs and that the plants of these two countries are “very competitive”.
Although Hackett said he does not expect the alliance to mean a cut in the number of jobs at Ford, Farley did make it clear that in the case of Europe, the company is in full restructuring of its operations and will do “everything that is necessary” to be profitable in the European Union (EU).
“There are areas that are not performing adequately and we are going to deal with that,” Farley said.
Both Ford and VW stressed that what was announced today is only the beginning of the collaboration between the two manufacturers and that the real objective is to reach an agreement to produce electric and autonomous vehicles, the future of the sector.
According to Hackett, sharing the costs of developing these technologies will allow Ford to maintain a strong balance sheet and be financially prepared to face any new crisis that may affect the sector. (EFEUSA) .-