By on January 21, 2019

Like stern parents who just don’t understand, Wall Street analysts are playing hard to please when it comes to the alliance forged between Ford and Volkswagen. The two automakers made their deepened relationship official at last week’s North American International Auto Show, promising to breed a new generation of commercial vans for the European market, a Volkswagen-badged Ranger pickup, and perhaps much, much more.

While financial onlookers are of two minds on the tie-up, Ford’s stock has its mind made up. It’s staying in its room, as stubbornly depressed as before.

As there’s no cross-ownership in this alliance, both automakers clearly wish to keep their future options open. They’re not buying a house and picking out china patterns, just shacking up for a bit. We’ll see where it goes.

The possibilities are many. Volkswagen seems interested in Ford’s investments in autonomous mobility (self-driving cars and related tech), while Ford has reason to desire VW’s MEB electric vehicle architecture. It’s true that the tie-up could solve some of Ford’s European woes, where its business acts as an anchor dragging down the company’s global balance sheet, as well as VW’s need for an Amarok pickup replacement. (The planned pickup, developed with joint funds and built by Ford, would only come along in 2022, once the next-gen Ranger arrives.)

It’s worth noting that the Ranger-based pickup wouldn’t be made available for sale in the U.S. The absence of new product for U.S. consumers arising from the alliance met with tepid interest from Wall Street.

As cited by Automotive News, rockstar analyst Adam Jonas of Morgan Stanley was firmly in the “meh” camp, telling investors the firm “wouldn’t get too excited” about the partnership. “We believe it is unlikely that VW would collaborate on anything significant with any OEM that it could not substantially control,” he added.

John Murphy of Bank of America Merrill Lynch warned of risks arising from the alliance, saying “What’s good for VW might not be so good for Ford.”

Both Ford CEO Jim Hackett, who insists the alliance will create value for both companies, and chairman Bill Ford stand by the decision. The two men have previously stated that Ford’s playing a long game; results won’t happen overnight.

Certainly, the announcement didn’t do anything for Ford’s stock price, which is commonly cited as the cause of former CEO Mark Fields’ ousting. Share prices dipped following last week’s news, not recovering fully in the days since.

Bill Ford, speaking at last week’s Automotive News World Congress in Detroit, said playing the long game means confusion in the short term, at least among analysts.

“We can’t really tip our hand beforehand on a lot of the things we’re doing,” he said. “We have to sort of say to people ‘Take our word for it,’ but analysts have models they have to create. Taking our word for it doesn’t fill out a model.”

[Image: Adam Tonge/TTAC]

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39 Comments on “Wall Street Doesn’t Think Much of Ford’s Relationship With Volkswagen...”

  • avatar
    Art Vandelay

    Ford, you build automobiles. Focus on that and let the rest sort out (which it will if you get that part right).

    • 0 avatar

      Wrong. Ford builds “mobility”! VW is going to help greatly with that part. They just want info on how to build F150s in exchange. More than fair!

      • 0 avatar

        Soon Ford won’t “Focus” on anything…

        This “Fusion” with VW is going nowhere…

        I don’t see Hackett planning a Fiesta anytime soon…

        • 0 avatar


          Surprised the response is so LTD. I’d have expected a Fairmont more.

        • 0 avatar
          el scotto

          @PrinciaplDan; they think they’re Explorers heading out on a great Expedition heading were the Thunderbirds and the Falcolns fly and there are meadows were Mustangs run and Pintos gallop, Comets shot across the Galaxy and Cyclones twist away. Oh, they may wish for a Fairlane but I predict rugged Sporttracs ahead. The ones who speak in strange tongues will say things like Cyclone, Marauder and the holy of holies, Shelby. In the end, Farley won’t have an Edge and will be looking for a good Escape.

          • 0 avatar

            The little rent-a-shorty dude behind the wheel is just praying they’ll step in front of the car.

          • 0 avatar


          • 0 avatar

            The Expedition needs an Escort when going into the mountains, even something close to home, like the Sierras. Anything else, and they’d fail to see the Contours of the land, possibly getting lost! To go without said guidance could be a fatal Mystique!

      • 0 avatar

        Wrong again. Ford builds steel office furniture which also happens to have wheels and engine. Talk about synergies – magic word in Silicon Valley.

    • 0 avatar

      Ford has been building automobiles –very profitably, too– but Wall Street never cared much. It’s the Family’s control that (secretly, or not) must irritate these bozos.

  • avatar

    I get the impression that investors see VW as being crafty and dangerous, while they see Ford as a bunch of easily duped yokels.

  • avatar
    87 Morgan

    History is not all that kind to this type of thing…C/J/D & Daimler did not workout real well for anyone not from Daimler.

    I am inclined to agree with ToddAtlasF1s assessment…

  • avatar

    Interested to see how Porsche and Lamborghini will rebadge the F150

  • avatar

    I wonder if the right comparison is
    * Ford + Mazda
    * Ford + Volvo
    * Ford + Jaguar
    * GM + SAAB

    Can’t figure out why Wall Street wouldn’t love this type of announcement.

    • 0 avatar

      All this companies are small while Ford is huge (it gets smaller by every passing year but not is where Volvo is yet).

    • 0 avatar

      Not really the same thing. GM and Ford actually took an ownership stake in those companies, either whole or partial. Ford and VW are not taking an ownership stake in each other. This is more of a technology partnership like Ford and GM have with transmissions or Nissan and Mercedes have with the GLA/QX30 and Navarra/X-Class.

      • 0 avatar

        Right – quite my point: Wall Street has no super-clear point of reference or easy past comparison on the US Blue Chip company doing this before. All they see is risk. Not exactly courageous but im not sure it says much about the strategic décision.

    • 0 avatar
      Art Vandelay

      It’s probably closer to Isuzu taking the Chevette platform and building the Impulse while GM rebadges Isuzu pickups as Luvs.

  • avatar
    Felix Hoenikker

    Silicon valley companies can woo wall street with “stories”. I submit Tesla as an automotive example of this. Domestic car makers are not extended this courtesy. Ford had to show the money before their stock price will rise. Possible future scenarios carry no weight

  • avatar

    The stock hasn’t tripled already – OMG! Not like Tesla, 50 billion cars and dollars, day one!

  • avatar

    My take is Ford is only interested in developing models for markets where it makes a big pile of money, like the US. Elsewhere, the plan is to badge engineer cars from other companies to fill niches where US products do not fit.

    A number of years ago, Ford slapped a Mercury badge on a Nissan Quest.

    Now, in China, where Ford is getting hammered, they are badge engineering a Yusheng S330 as the Ford Territory.

    In India, Ford is reportedly having Mahindra develop an SUV on a SsangYong platform for them to slap a blue oval on.

    Ford sells the large Transits, in quantity, in the US, so they are OK with putting development money into big Transits. So VW moves it’s commercial van sourcing to the Transit plant in Turkey and enjoys the cheaper labor.

    Ford doesn’t sell very many Transit Connects in the US, so they don’t want to spend any money on it. So, they buy VW Caddys for European sale instead.

    Ford wants to sell the Ranger in the US, so is OK with spending money on it, so VW hitches a ride on that product.

    I expect the next shoe to drop will be a deal where the EU market Ford passenger cars are replaced by badge engineered VWs and Skodas, because Ford doesn’t want to spend any money on small passenger cars.

    My suspicion is, by the time this alliance plays out, in 4 years or so, outside of the occasional Mustang and Explorer, along with the big Transits, Ford Europe will be nothing but a marketing company peddling VAG products, unless they can get the badge engineered Chinese and Indian stuff past EU regulators.

    • 0 avatar

      Ford also sold a rebadged Nissan Terrano as the European Maverick.

      Fords on VW platforms makes sense, the platform is designed to underpin a variety of cars. Skoda Octavia/Superb are similar to the Fusion/Mondeo, the new Scala is like a cross between a Volvo V40 and a Focus.

      It should be straightforward to get Indian and Chinese cars into Europe – the Ecosport originated in India, Rover briefly sold the CityRover which was a rebadged Tata, and Chinese cars are already on sale – MGs are fairly popular and usually sold from old Rover dealers, Great Wall pickup trucks were cheap and fairly rugged.

  • avatar

    It’s cringeworthy to see those two Ford executives with $10M+ salaries pretend to be everyday people, wearing jeans and matching blue vests.

  • avatar
    R Henry

    Hackett’s gotta go. Call Security and escort him out of the building.

  • avatar

    Ford could announce a cure for cancer, and Wall St would still shrug.

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