By on October 17, 2018

Back in June, we brought you news that Ford Motor Company and Volkswagen AG seemed to be working on a relationship — potentially yielding jointly developed products aimed at the commercial sector. At the time, both companies issued a joint memorandum of understanding about potential product alliances.

With the Blue Oval’s stock price in the dumpster, Jim Hackett constantly nattering about “fitness,” and VW’s desire to increase its market share in America, it wouldn’t be the oddest of marriages if these two companies joined forces in more than just the commercial market.

Stranger things have happened … like DaimlerChrysler. Wait, that’s probably a bad example.

Sure, a mashup of the world’s biggest and fifth biggest automakers would create a juggernaut unlike anything the world has ever seen.

It makes more than a lick of sense. Ford’s jumping out of the car game, a segment in which VW is flush with product. Volkswagen’s cupboards are pretty bare when it comes to pickups and other gonzo-sized (and gonzo-profit) machines, but the Glass House is stuffed with the things. Between them both, they’d have all segments covered like syrup on waffles.

Over at the Detroit Free Press, talking heads are making some good arguments.

“Something big is brewing,” said John McElroy, Autoline.tv host and longtime industry analyst. “Look, if it isn’t, (Ford CEO) Jim Hackett can’t survive. He has got to drop a bombshell on the industry.”

He goes on to point out that the average consumer – not gearheads like those reading and writing for this site – don’t know and in fact don’t care what’s under the hood of their ride. Do you really think that South Street Sally would be concerned if that’s a Ford-developed or VW-engineered transmission in her crossover, so long as it works?

For further on-paper rationalization of this tie-up, look towards China. VW, or a VW-related entity, is responsible for nearly one out of every six cars sold in that country. Even with rumblings of a sales downturn, China is hardly a market that can be ignored. Here in the States, Ford is said to make nearly 40 percent of full-sized pickups purchased. Both companies would love to get their proverbial lug nuts on each of those numbers.

Of course, any talk of a merger between two large automakers calls to mind the beast that was DaimlerChrysler. What seemed to be like a good idea at the time quickly gave way to massive internal culture clashes and the feeling that, ja, the Germans did own the place, not the Americans.

Your author recalls reading stories from insiders at the time. Bud Liebler recalled a top-brass exec from Germany looking at the top floor of Chrysler HQ in Auburn Hills, gazing at the Pentastar-shaped window and saying “that’s got to go.” He was quickly informed that it wasn’t going anywhere since it was, y’know, structurally holding up the building. Another great rumour is that Schrempp allegedly turned off the sprinklers in his office so he could smoke cigars, flying in the face of Chrysler’s no smoking policy. A fascinating read about the culture clashes, with stories straight from the like of Liebler and Bob Lutz, can be found here.

When participants in a megamerger don’t share values, major problems can rear their ugly head. If working styles and assumptions are vastly different from the get-go, it’s monumentally difficult to align them after the fact given that humans are humans and often don’t like change.

Sharing vehicle platforms and powertrains is key to saving mass amounts of money and realizing efficiencies in today’s environment. The late Sergio Marchionne expounded on this point many, many times – to the point where he appeared to make active overtures of a merger towards outfits like General Motors. The man had a point, but no one was willing to be FCA’s dance partner.

It was two decades ago this year Chrysler and Daimler entered into a “merger of equals” that largely turned out to be anything but. Would it be different for Ford and VW?

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54 Comments on “Fordvergnügen: What Would a Ford/VW Merger Look Like?...”


  • avatar
    PrincipalDan

    What would a Ford/VW merger look like?

    Passatt-a-Taurus built in Chattanooga! Jetta All-Trac badged Focus!

    See Ford doesn’t have to get out of the car business after-all.

  • avatar
    bullnuke

    Oddly, this could have happened some 73 years ago. Henry the Deuce, however, turned down the offer (from the British IIRC) of control/ownership the volkswagenwerke after the end of WWII in Europe.

  • avatar
    APaGttH

    A VW/Ford merger would produce cars and trucks that burst into flames before regulators can determine the emissions systems are cheating.

    It’s a match made in heaven.*

    * The above is snark, and nothing but snark. If you’ve been triggered I suggest decaf, maybe yoga.

  • avatar
    Kyree S. Williams

    Well, perhaps the lead designer of Bentley wouldn’t blast the Continental for copying the Flying Spur’s shape.

    https://bit.ly/2J1C4bG

  • avatar
    Sigivald

    … stock price? Seriously?

  • avatar
    Art Vandelay

    Well, it is certainly interesting

  • avatar

    German and American car companies have a toxic history working together. However, since Hackett is without any rational ideas maybe it could happen. However, in the trump era this merger would probably be unlikely.

  • avatar
    EquipmentJunkie

    This story validates what I said when Ford announced it was getting out of the auto business. On paper, the VW/Ford marriage works. Ford has already paved the way for the regulators by cutting cars…and Wolfsburg’s arrogant mismanagement of the US market have done their part, too.

    The combined business needs to be structured like Renault/Nissan has been with significant autonomy for both brands/continents and headed by somebody like Carlos Ghosn or Sergio Marchionne.

    We shall see…

    • 0 avatar
      hreardon

      EquipmentJunkie –

      That’s something I’ve been considering as well. Renault-Nissan have demonstrated that their “unique” model can actually work better than straight out mergers.

      While on paper this makes a lot of sense, so did Daimler-Chrysler. The DCX experiment failed due to a bad corporate culture mix and, ironically, Schrempp’s lack of desire to impose his real will upon Chrysler. Had the Germans cleaned house immediately and been honest about their intent after the papers were signed, things might have turned out different. Instead, they tried to walk a fine line that ultimately backfired.

      Volkswagen providing Ford the MQB architecture for cars and CUVs makes sense. Volkswagen gets Ford trucks – but it’s not like we’re going to see them re-branded as VWs, with the exception of maybe the new Ranger.

      Ford gets better access to China and the EU, VW to the US and South America.

      The big question becomes: can they make the culture work?

      • 0 avatar
        EquipmentJunkie

        The average car person (let alone the average person on the street) really has no knowledge of the Renault-Nissan ties. So, a VW-Ford arrangement could work from that standpoint. The correct corporate leadership and people to oversee development of powertrains and body architecture would be crucial to keep culture hostilies to a minimum. It won’t be easy. I’m more worried about VW’s know-it-all nature with regards to the US market. That came from the top (Piech) and the top is now aging and less involved. We’ll see if that arrogant attitude changes.

        I see the financial benefits of a Ford & VW alignment being threefold: powertrain development, tech development, and body architecture. Ford could lead development of engines over 3 liters and commercial bodies. VW for the smaller engines and auto architecture. Tech interfaces are still a bit of an unknown.

        I have owned two recent Ford and VW autos in the last couple of years. These two companies are much closer in product than they used to be. I won’t immediately be the Negative Nancy if this comes to pass.

      • 0 avatar
        WildcatMatt

        Agreed with this. If you have two corporate cultures that aren’t going to mesh, you either keep them separated except at the top or else you pick the winning culture and eradicate the other.

        Having watched a couple of different mergers/acquisitions take place overhead, my philosophy is straightforward: If you’re going to make me eat a $hit sandwich, don’t waste time trying to tell me it’s filet mignon. Just tell me what it is and hand me the bottle of ketchup.

  • avatar
    Jeff S

    I have no opinion either way since I will not buy a VW product and I am less likely to buy another Ford. What ever works for Ford and VW.

  • avatar
    tylanner

    VW would have very little to gain in purchasing Ford….aside from the comic relief when they review the design details of the Powersh!t transmission.

    • 0 avatar
      raph

      Sorta like Fiat had very little to gain when it acquired Chrysler and Jeep with it…

      VW would net as the article stated the biggest truck manufacturer in the US. Mustang sales are a drop in the bucket so they could kill it off and only about 80,000 intenders would shed a tear after that it would just be a fond memory much to the delight of Dodge and Chevrolet or keep it around as a pet project and maybe rebadge an AWD chassis with a nice hybrid T4 and slap a horse on the grill and tell everybody its all about a kinder greener future with Mustang.

    • 0 avatar
      notapreppie

      I’m pretty sure they wouldn’t even bother reviewing the details. They’ve got a reasonable good DCT already.

    • 0 avatar
      JimZ

      “VW would have very little to gain in purchasing Ford….aside from the comic relief when they review the design details of the Powersh!t transmission.”

      you mean the one built by Getrag, from whom VW gets plenty of transmissions from themselves?

  • avatar
    NoID

    Because VW Group doesn’t have enough brands already.

  • avatar
    tomLU86

    It’s a good match.

    I don’t like it at all, but it’s a good match.

    VW has not really succeeded in the US since the early 1970s. It almost did an Renault/Peugeot/Fiat and bailed on the US in 1992. The US, then and now, remains the richest, most open market on earth.

    Ford is really F-150 motors. They can, and have, made many decent cars, but apparently, they are throwing them away.

    I thought the last Passat looked like a Ford 500/Taurus.

    Unlike Chrysler (a small, North-America-centric) and Daimler-Benz (titan of German industry, global, not to mention arsenal of the people who brought us WWII), Ford and VW are more evenly matched. And the Ford family will not sell their NAME the way Bob Eaton sold out his company to line his pocket.

    Trucks–mega profits today, who does them better than Ford (when it comes to making the most, and highest transaction prices?)

    China–Ford is way behind, VW is already there.

    I agree, a cold, calculating manager like Ghosn perched atop two largely independent companies, working together only on components unseen by customers (which are built by suppliers anyway) and pooling their resources for electric/autonomous, new to both, could be a formidable company. They just aren’t in Japan or Korea–though VW used to advertise, they were the number one import.

    TTAC spotted it, yeah, I hate to say this ,but I see it too….

    • 0 avatar
      sportyaccordy

      I don’t know. They both have strengths, but they both have problems which can compound. A Ford badged Golf will do about as well as those Chevy/Geo/Pontiac badged Corollas. There are huge cost savings to be had in shared components but as both companies have shown that comes at huge risk. And then there are the cultural issues…..

      • 0 avatar
        hreardon

        I don’t think you’re going to see rebadged much of anything – I think you’re going to see Volkswagen gain trucks, and Ford gaining access to VW’s MQB and MLB architecture which will significantly curtail development costs.

        More for Ford: VW is far advanced in their electrification plans, an investment that Ford has bungled and they know it.

        More I think of it, I believe we’re looking at a Renault-Nissan type mashup. Why ruin what works at both individually?

        • 0 avatar
          sportyaccordy

          I am just not sure it’s that simple. If one company could fill the holes of the other, cool… but there is so much overlap, and both have made huge investments going forward. They both have MQB/MLB platforms. They both have full engine lineups. Etc. Stuff they invested in is gonna have to get scrapped to kill redundancy.

          Like say they bring the next Edge onto the MQB platform. The CD4 platform the current one is on is only 5 years old. That’s a lot of capital to flush down the drain. OK, maybe they can wait until it’s time to do the CD5…. but that’s a long time to wait. Shareholders want to see synergy savings NAO, not in 10 years. So there are a lot of headwinds.

  • avatar
    haroldingpatrick

    How would this work out with the “special” stock owned only by the Ford family? I’ll say this, VW could show Ford how to make body panels fit and paint jobs to have less orange peel . . .

  • avatar
    Jerome10

    Never gonna happen.

    What would be the point, honestly. Ford already makes better European cars than VW does. Ford makes better trucks. Ford makes better crossovers. Ford has the more recognizable global brand. Ford has better EV/hybrid tech. Diesel engines are dying, and VW cheated on those as well.

    VW has a million brands already.

    2 giant companies fighting over who is “in charge”. Think Daimler-Chrysler except multiply by 100.

    But hey, you never know. If those signing the papers get to double their stock valuation and walk away, then that might just be enough.

    • 0 avatar
      CKNSLS Sierra SLT

      Jerome10-

      Ford’s share is miserable in China. The biggest emerging car market. That’s the point.

    • 0 avatar
      bufguy

      VW makes far better European cars than Ford….Golf vs Focus…Polo vs. Fiesta…Passat vs Mondeo…..and I haven’t even included Audi…VW with its MQB platform is incredibly versatile, well designed and cost effective to build. One of the reasons VW is so much larger than Ford now.

      • 0 avatar
        WallMeerkat

        VWs brands also make better European cars than Ford. The Octavia and Superb wipe the floor with the Mondeo, the Leon is a sportier alternative to a Focus, and while the Fiesta is a top seller (fleets usually), the Fabia and Ibiza are better looking, while the Up/Citigo/Mii sell well where the Ka+ doesn’t.

  • avatar
    civicjohn

    “If those signing the papers get to double their stock valuation and walk away, then that might just be enough.”

    It would be enough for me.

  • avatar
    el scotto

    The extended Ford family owns the stock that controls Ford Motor Company. What they decide is how the company goes. Same thing with John Elkann/EXOR/the Agnelli family controlling FCA. Any other comments are just speculation. Or the “Crime of the Century” reported every quarter.

  • avatar
    Art Vandelay

    Nobody has mentioned it yet, but this would certainly bring interesting product possibilities to Lincoln through Audi and VAGs premiere offerings.

    • 0 avatar
      JimZ

      “Nobody has mentioned it yet, but this would certainly bring interesting product possibilities to Lincoln through Audi and VAGs premiere offerings.”

      yeah, no. have you forgotten PAG? Lincoln was supposed to benefit from being in the same group with Jag, L-R, AM, and Volvo, and look what happened. Lincoln got neglected to the point of being barely more than slightly nicer Mercurys.

      • 0 avatar
        Art Vandelay

        Times are different. Just giving Lincoln some product based on the MQB would be a real boost.

        Additionally, you’d see the Amorok and Ranger become one and perhaps we would be able to answer the question of weather us full sized trucks would sell overseas wit VW pushing them via their commercial channels.

        Still, softer edged Audi’s with the high end interiors Lincoln was putting in the black edition Continental would I think be intriguing and I think find a market. We aren’t talking managing a bunch of brands…we are talking Lincoln showrooms having VAG cars with Lincoln Stars instead of Ford Cars.

        • 0 avatar
          hreardon

          Ford dropped sedans because the cost of new vehicle programs is staggering.

          Leveraging Volkswagen’s engineering and MQB/MLB architecture would provide the solution to make Lincoln financially viable. The VW architectures have already demonstrated how variable they are (Atlas and Golf on the same kit, as an example).

  • avatar
    Ce he sin

    It wouldn’t be the first time in recent years that Ford and VW have co operated. They built the same-but-different VW Sharan/Ford Galaxy in a jointly owned plant in Portugal for several years from the mid 90s to the early 00s.

  • avatar
    dusterdude

    I think the DaimlerChrysler merger proved that American and German management styles don’t mix well ( more rigid versus more free wheeling) … A GM and Ford merger should be considered though !

    • 0 avatar
      Big Al from Oz

      I agree duster. You can see how the less flexible US manufacturers seem to struggle in the global markets.

      Looking at the success of the Asian manufacturers is also worth noting.

    • 0 avatar
      hreardon

      At its core, it was a clash of different corporate cultures. But dig deeper and you’ll find it was much more complex.

      Ironically, Big Al, part of Daimler’s interest in ChryCo was their management style: much faster paced decision making than Daimler. The problem is that Schrempp tried to walk a fine line and accommodate the US management because he thought they could lend a great deal of energy – but Daimler’s management team was never willing to take a backseat to Chrysler. Pride, ego, and German dogmatism.

      The American management team pretty quickly realized they were on the losing end and the best of ChryCo bolted within 24 months. At that point, the writing was on the wall.

      The world is very different now, and DCX is used as a case study in business schools around the globe. Maybe lessons were learned….maybe not. As is usual, success and failure will be determined by the wisdom and egos of the leaders.

  • avatar
    Gustavo Arriagada

    Ford and VW already got in bed during the 80’s in Southamerica, when they created Autolatina to jointly compete against Fiat.
    A not so nice badge engineering project…

  • avatar
    WallMeerkat

    Ford and VW Brazil shared cars, there were VW versions of Ford Escort sedans and hatchbacks, and Ford badged VW Santanas.

    In Europe the Galaxy minivan was a rebadged VW Sharon / SEAT Alahambra.

    VW in Europe has too many mainstream brands as is, it might need them to axe or merge a few if they took on Ford.

    However in the US they could re-establish Ford passenger cars with rebadged Skodas. The Superb would make a fine Fusion.

  • avatar
    Lockstops

    “Do you really think that South Street Sally would be concerned if that’s a Ford-developed or VW-engineered transmission in her crossover, so long as it works?”
    People repeat lines like this and it baffles me. Don’t they realise that ‘South Street Sally’ does in fact care about what others think of her ride’s status and quality. It’s the others who will know what standing the company’s reputation will be, including the level of technical sophistication. ‘South Street Sally’ might not know what’s under the hood of a Rolls-Royce but she does know that the brand is respected and that she can trust that it’s going to be very good. If Rolls-Royce suddenly started plonking in 4-pot VW diesels in there then the image of Rolls-Royce would plummet and ‘South Street Sally’ would in fact care.

    • 0 avatar
      hreardon

      Lockstops: Good point. People don’t care about the nuts and bolts. This is why brands matter more today than ever before.

    • 0 avatar
      sportyaccordy

      “South Street Sally” had no problem with GM transmission in her BMWs for over a decade or 4 bangers in her $70K 530i/E300s today. As long as the car has the right badge and feels luxurious nobody cares where the parts come from.


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