Fordvergngen: What Would a Ford/VW Merger Look Like?

Matthew Guy
by Matthew Guy
fordvergngen what would a ford vw merger look like

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, 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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4 of 54 comments
  • WallMeerkat WallMeerkat on Oct 18, 2018

    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.

  • Lockstops Lockstops on Oct 18, 2018

    "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.

    • See 1 previous
    • Sportyaccordy Sportyaccordy on Oct 18, 2018

      "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.

  • ToolGuy VW (marque not group) and Tesla very nearly switched positions on a YTD basis.
  • RHD Inexpensive gasoline appears to be a thing of the past. ILO is correct - we have enough sunlight, wind and emerging ocean wave energy to power the entire country and then some. Clean air is nice, and being free of the whims of OPEC, geopolitics and hugely profitable oil companies will do all of us a world of good.
  • Raymond Segura Can you tell me where I can get the rear bumper for 69 impala?
  • Art Vandelay some of the crazy numbers I get. Percentages look bigger with any fluctuations with low volume makes and brands leaving the market will see massive month over month changes. But what’s with Buick? I still see the occasional ad on TV and yet the drop is disproportionate even compared to all the other GM brands.
  • Master Baiter "There is no mandate for consumers to buy EVs, not in any country or state. That’s made up."Right. And you are not mandated to purchase a toilet that only uses 1.6 gallons/flush. You could choose to not have a toilet--just go in the woods, like the bears do.