By on December 5, 2018

Months of speculation fueled by the increasingly chummy relationship between Ford and Volkswagen has given way to new possibilities. The two partners, who signed a Memorandum of Understanding earlier this year, might leap further into bed than initially thought.

To hear VW CEO Herbert Diess tell it, the two automakers might soon share American assembly space. And can Tennessee expect a new plant? It’s on the table.

Diess was in Washington D.C. this week for a White House meeting. Stopping to speak with assembled media, Diess claimed the German company was (quite eagerly, it seems) building an alliance with its American partner.

“We are in quite advanced negotiations and dialog with Ford Corporation to really build up a global automotive alliance, which also would strengthen the American automotive industry,” Diess told Reuters, adding that his company was considering building a second assembly plant in the United States.

An alliance could result in VW building cars in underutilized Ford factories, he said.

“We are building an alliance with Ford which will strengthen Ford’s position in Europe because we will share platforms,” Diess commented. “We might use Ford capacity here in the U.S. to build cars for us.”

Unlike the Renault-Nissan Alliance, this one wouldn’t see VW take a stake in the other company. Rather, it would be all about product and capacity.

When reporters in Detroit questioned Bill Ford Jr. about Diess’ remarks, the Ford chairman replied that talks with VW were going “very well,” though he remained much more tight-lipped than his German counterpart. Asked about the possibility of joint products or shared production space, Ford said the two “haven’t gotten that granular in our talks yet.”

Earlier remarks by VW execs and company sources suggested the main goal for the two companies was the production of light commercial vehicles in Europe. That eventually migrated to the possibility of jointly developed models, or perhaps platform swaps, in other segments. VW is apparently quite interested in Ford’s midsize Ranger pickup, while the company’s MEB electric platform could prove quite useful to Ford.

As for a second VW plant, Diess said the company is in “quite advanced negotiations in Tennessee but there might be other options as well.” Currently, the automaker’s Chattanooga assembly plant isn’t running at capacity, though new products are likely on the way. They include a shorter, sportier version of the Atlas, an Atlas-based pickup, and MEB-platform I.D. models.

If you’re thinking all of this talk of boosted U.S. VW production, accomplished in whatever way possible, is a good way to insulate VW from possible tariffs on European vehicles, well, you’re not alone.

“That’s basically why we are here, to avoid the additional tariffs, and I think we’re in a good way,” Diess told Bloomberg outside the White House.

[Image: Ford Motor Company]

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40 Comments on “A New Alliance? Volkswagen and Ford In Talks to Share U.S. Plants...”


  • avatar

    So the VW is going to be responsible for the next Fusion. It will not work.

    • 0 avatar
      WallMeerkat

      If they rebadged the Skoda Superb it would make a fine car.

      • 0 avatar
        cognoscenti

        “If they rebadged the Skoda Superb it would make a fine car.”

        I just can’t get over the fact that Skoda actually sells a car called the “Superb”. It’s their flagship model and has been in continuous production for 18 years and three (VW chassis variant) generations.

        What would some example names for vehicles be if we did this in the US?
        Ford Awesome
        Lincoln Magnificent
        Buick Exquisite
        Chrysler Majestic

        All of them sound every bit as pretentious as “Superb”.

    • 0 avatar
      SPPPP

      The current Passat is a nice sedan. I don’t see any reason that Ford and VW can’t share a platform and make a viable sedan. Or two.

      From what I gather, the Fusion was slightly profitable. It just wasn’t profitable enough for Ford’s liking to justify developing a new model.

      • 0 avatar
        Scoutdude

        Yes the Fusion is profitable by all accounts, just not profitable enough to justify tooling for a new model when the sales trend for sedans is down. Getting in bed with VW won’t help that case as they already have a platform for a new Fusion, and were well under way of developing the new body when they canceled it.

        Personally I don’t see this JV producing anything more than the vans they had initially planned and possibly a version of the Ranger for VW but I really doubt that if they do agree to sell VW Rangers that they will allow VW to sell them in the US and Canada.

        • 0 avatar
          DenverMike

          I don’t see Ford having a problem with it. Mazda B-series pickups and Navajos competed directly with Rangers and Explorers in recent history, same with minivans shared with Nissan.

          Whether VW invests in Ranger production or simply buys them at cost or wholesale, (or other arrangement) it can all be negotiated. But end of day, there has to many VW customers that would never buy a Ranger (or Ford ‘anything’), but would buy a VW re-badged (or re-skinned) Ranger in a heartbeat.

  • avatar
    threeer

    And after 2026, VW will (apparently) have developed their last internal combustion engine. I guess it’ll be all electric boogie for VW after that…

  • avatar
    PrincipalDan

    In one of the articles about GM and the cancellation of product I read that an automotive factory needed to operate at roughly 80% production capacity to make a profit. Can any body back that up? It is one piece of reasoning that I can think of for Ford and VW hooking up (including sharing factories.)

    (The same article noted that FCA is operating the Charger/Challenger/300 factory at approximately 80% of capacity.)

    • 0 avatar
      TrailerTrash

      not sure about the auto industry plant, but my early history in the commodity of dairy plant operations, machine, and plant use was absolutely a make it or break it measurement.
      we had meetings all the time with sales. if the 1/2 pint or gallon lines weren’t running for full 23-hour production, with downtimes strictly for cleaning and product change-over, the teams were directed to fill the time.
      even if selling at a lower cost was needed, the machines had to be producing.

      i often sold to customers at lower prices just to keep the lines running.

      and anybody in manufacturing knows that the more your plants run, the more the machines run, the more efficient and lower production cost per product.

      • 0 avatar
        PrincipalDan

        I was just wondering about that % level.

        From what I’ve read many of the GM plants were running at about 50% capacity. That seems that the capacity was at a level of hubris as to when Rodger Smith thought the W-body was going to make up 50% of the sedan market after its debut.

  • avatar
    darex

    VW:
    Cheats on math test; get’s caught. Declares math to be hard, and refuses to do any more math tests, because they’re too hard.

    …and the public is suppose to praise them and reward them, and forget all about the dishonesty, and incompetence. How Millennial!

    Honestly, VW is the last company that I’d want to have any dealings with, either as a partner in manufacturing, or as a customer.

    • 0 avatar
      raph

      Meh… most consumers are way more pragmatic when it comes to meeting a price point than standing on principle.

      If the Ford/VW relationship produces competitive vehicles and they are priced right they will sell.

    • 0 avatar
      vehic1

      Let us all know when you discover the that forever-flawless, blameless, saintly automaker – with zero problems (either intentional, or via sloppy oversight) in its history.

      • 0 avatar
        highdesertcat

        Good point. But if a person would rather buy a VW instead of a Ford, why would that person buy a VW MADE BY Ford? It would just be a rose by any other name.

        • 0 avatar
          Wheatridger

          I’d rather buy a Ford made by VW, judging from the ragged welds visible in the body of my Ford C-Max. But either way, I’d delighted at this budding romance. (Happy? On this forum? Ban him!)

          Haters are gonna hate, but I’m speaking from personal experience. After owning a dozen VWs, I’ve bought my first Ford since Mom’s ’66 Mustang. It gives me almost the same amount of farvergnugen as any of those VWs. Basically just a fat Focus, the C-Max steering betters my GTI, and its ride/handling compromise is excellent. The Ford hybrid/PHEV drivetrain knocks it out of the park, returning 65 mpg so far and maintaining the capability of an 8-sec 0-60 run. Put this lump under the hood of the next Golf, and I’m all in!

          • 0 avatar
            highdesertcat

            I could be swayed if Ford built a VW Passat with the Banks TurboDiesel under the hood.

            The Passat driver could idle in fourth gear and keep up with traffic. Imagine the mpgs!

  • avatar
    28-Cars-Later

    Merger of equals!

  • avatar
    EquipmentJunkie

    Auto manufacturing is all about getting volume to cover fixed costs. This idea seems to mutually scratch the backs of both VW & Ford.

    Creating a new US assembly plant takes years. Keeping an existing plant busy with new product only takes months.

    Ford covers fixed costs with added volume. VW gets to market faster with whatever product they have up their sleeve with less fixed costs. Minimal risk for both. The devil is always in the details. However, what’s the downside?

    • 0 avatar
      highdesertcat

      The downside is, “Who is going to taint the other more? Ford or VW?

      It is indeed rare that two bads make one good.

      • 0 avatar
        EquipmentJunkie

        I doubt that the average citizen will really care or even know who made what and where.

        For what it’s worth, I’ve owned both brands repeatedly and haven’t had any issues with the product. Both of my Ford & VW dealers have even been better than average in customer service.

        • 0 avatar
          Luke42

          Based in my experience with a made-almost-20-years-ago VW sedan, VW’s reliability ratings might do a lot to taint Ford’s reputation.

          If VW doesn’t have their stuff together, Ford’s reputation will suffer badly.

          • 0 avatar
            Fordson

            I think you really don’t want to come out on the internet and say you’re basing your opinion of a particular brand’s performance/reliability/resale/feature mix, etc. on an anecdotal (sample size of one) experience from almost 20 years ago.

          • 0 avatar
            Luke42

            My VW experience was epically bad.

            Like “changing transmissions more often then I change oil” bad.

            VW paired the ZF 01M with a 1.9L diesel engine. This resulted in internal fractures within the transmission housing. VW just replaced the gearboxes at 50k-miles or so under warranty, without fixing the root cause. Anyone who owned a VW beyond the warranty period (a risk a reasonable person might take with for a Ford/Honda/Toyota/Chevy/Mazda/etc)

            It’s the same kind of refusal to acknowledge a problem which we see again during the diesel scandal
            This indicates a chronic problem within VW’s culture as an engineering organization that’s likely to bite Ford bad.

            German Engineering doesn’t mean much to me these days. Which pisses me off, since I’m an American engineer with a German last name.

  • avatar
    28-Cars-Later

    If platform sharing is on the menu it perhaps explains Ford’s cull of Fusion/Focus/Fiesta/Taurus. Will be interested to see how the jobs situation pans out as well. Ford might come out ahead in many ways with this news.

    • 0 avatar
      WallMeerkat

      If you look at how many cars in Europe are built off the MQB / Golf platform, and the Polo platform, VW are the kings of platform sharing.

    • 0 avatar
      SPPPP

      The platform sharing would make an awful lot of sense for Ford. However, it would leave a lot of egg on the face of Ford’s leadership, who just made a big deal out of dropping all cars, and alienated lots of customers in the process. Does Ford have the institutional humility (if there is such a thing) to admit it was wrong and bring cars back so soon? I doubt it.

      More likely, the relationship will be limited to plant sharing for now, with a possible re-introduction of Ford cars at a later date when future events provide plausible cover for the major about-face.

      That being said, I suspect that certain executives within Ford will face very strong temptation to move the Mustang to the MQB platform. Will it happen? I think it might. Think of the dozens of white collar employees they could lay off if they do.

      • 0 avatar
        Fordson

        ??? MQB is a fwd/awd transverse-engine front-weight-biased platform. None of that describes the Mustang. There is about as much chance of the next Mustang being made on this platform as there is of the next F150 being made on it.

  • avatar
    FWD Donuts

    More proof that Sergio’s call for increased industry consolidation was right.

  • avatar
    redgolf

    GM already did this with Toyota at the NUMMI plant in Cali, lasted from 1984 until 2010. producing the Nova/Prism, Corolla, Tacoma. once considered “the worst workforce in the US” (according to the UAW) by the time they built their first Nova, they were producing cars at the same speed and few defects as Japan plants!(according to Wikipedia) proving that a “World Workforce” is viable!

  • avatar
    Superdessucke

    Good. They can slap a blue oval and a Focus name plate on the back of a Golf and save me a year or two of extra taxes to bail them out once the CUV trend runs its course.

    • 0 avatar
      jatz

      “once the CUV trend runs its course”

      Not a trend but a return to pre-Eisenhower market normalcy as in the taller, higher-riding cars from the Model T to the early’50s.

      There are ever fewer young, male and well-earning car enthusiasts to support anything else. The cars that you pine for belong to Peak America.

      • 0 avatar
        SPPPP

        “There are ever fewer young, male and well-earning car enthusiasts to support anything else. The cars that you pine for belong to Peak America.”

        Insightful and highly quotable post there.

      • 0 avatar
        Superdessucke

        Sounds like you’ve been drinking the Kool Aid. But if you want to compare your RAV4 to a Model T, go for it and enjoy your significant piece of automotive history, lol!

  • avatar
    geozinger

    I’m scratching my head on this one. For years, we’ve been told there is overcapacity in the US. GM’s recent announcement reinforces this idea. I don’t recall Ford closing as many plants in the last 8-10 years as GM, but they didn’t have as many to start with. VW has a middling market share in the US, I think the Golf/Jetta is the only car that really generates good sales numbers. Are the Atlas and Tiguan really that much in demand?

    I have a hard time seeing where VW needs the capacity (unless it’s strictly for the proposed van production). VW is essentially outsourcing it’s new product here in the US, which is kind of odd. Considering they have huge investments in Mexico, I would imagine it would be cheaper to produce there.

    • 0 avatar
      EquipmentJunkie

      Remember that this is a pre-emptive capacity issue. Ford is still building cars, but they won’t be for long. The end date of Ford auto production is a gathering storm on the horizon. Ford will be looking at over-capacity very soon.

      VW’s new Tiguan and Atlas are selling around 7k and 4-5k per month, respectively. Those numbers aren’t too shabby considering the limited number of VW dealers and the fact that VW was never really a strong player in that crossover and SUV market before.

  • avatar
    HotPotato

    Tennessee, my arse. I hear there are some fine GM plants up in Michigan just waiting for a new owner.


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