A New Alliance? Volkswagen and Ford In Talks to Share U.S. Plants
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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- Daniel J I had read an article several years ago that one of the issues that workers were complaining about with this plant is that 1/3 of the workforce were temporary workers. They didn't have the same benefits as the other 2/3 of the employees. Will this improve this situation or make it worse? Do temporary workers get a vote?I honestly don't care as long as it is not a requirement to work at the plant.
- Kosmo Tragic. Where in the name of all that is holy did anybody get the idea that self-driving cars were a good idea? I get the desire for lane-keeping, and use it myself, occasionally, but I don't even like to look across the car at my passenger while driving, let along relinquish complete control.
- Bof65705611 There’s one of these around the corner from me. It still runs…driven daily, in fact. That fact always surprises me.
- Master Baiter I'm skeptical of any project with government strings attached. I've read that the new CHIPS act which is supposed to bring semiconductor manufacturing back to the U.S. is so loaded with DEI requirements that companies would rather not even bother trying to set up shop here. Cheaper to keep buying from TSMC.
- CanadaCraig VOTE NO VW!
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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.
Tennessee, my arse. I hear there are some fine GM plants up in Michigan just waiting for a new owner.