By on June 10, 2020

Trail Trek Tour 2019 - 2019 Ford Ranger FX4 (1) - Image: Ford

Wednesday brought an expanded alliance between Ford Motor Company and Volkswagen, with the two auto giants inking a deal for the joint development and construction of a range of products.

Since last year’s tie-up, the desire among the two companies to use each other’s strengths to address gaps in the market has been well known, though today brought specifics. 

The Euro-centric plan (Ford claims “other regions” will benefit from new joint products, too) will begin bearing fruit in short order.

Detailed today, the long-in-the-tooth VW Amarok midsize pickup will remain on the market in name only, with the actual vehicle reverting to a new product based on Ford’s Ranger, the two companies said. Entering the Volkswagen Commercial Vehicles lineup in 2022, the vehicle will be developed and built by Ford.

Next year could also see the launch of a small Ford van based on the VW Caddy and built by Volkswagen Commercial Vehicles, while the German half of the relationship will see a 1-ton commercial van created by Ford. The Blue Oval already cleans up in this class with its versatile Transit.

Next up is a Ford electric vehicle that should arrive for European customers by 2023. Based on VW’s dedicated MEB architecture, the “highly differentiated” EV will help Ford gain ground in that region’s growing zero-emission vehicle market. Ford’s Cologne-Merkenich facility is tapped for this product, which the automaker claims could see sales of 600,000 vehicles over its lifespan.

“During the lifecycles of the products, the companies expect to produce up to a combined 8 million of the medium pickup truck and both commercial vans included in the commercial relationships,” Ford and VW said in a joint statement.

VW Group CEO Herbert Diess said the coronavirus pandemic has showed the need for “strong” companies to forge “resilient” alliances.

“This collaboration will efficiently drive down development costs, allowing broader global distribution of electric and commercial vehicles, and enhance the positions of both companies,” Diess said.

Ford CEO Jim Hackett called it a “huge opportunity to innovate and solve many of the world’s transportation challenges and deliver extraordinary benefits to customers – even as companies need to be selective about how they use their cash.”

Thanks to billions of dollars in funding between the two of them, the companies also plan to develop “distinct, highly capable autonomous-vehicle businesses” using self-driving tech developed by U.S. startup Argo AI.

[Image: Ford]

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20 Comments on “Ford and Volkswagen Nuzzle Up Even Closer, Reveal Joint Product Push Details...”

  • avatar

    Volkswagen: A leopard cannot change its spots. Ford beware. :-/

  • avatar

    I know what some folks are thinking however for some reason I believe that Ford will not be bought out by VW and that we will truely see a merger of somewhat equals.

    • 0 avatar

      “Merger of equals”? Like the ‘merger of equals’ between Chrysler and Daimler-Benz? Remember how you pronounce “Daimler-Chrysler AG”? The ‘Chrysler’ is silent.

      Nice idea, but doesn’t happen. One company buys another. Especially when it comes to colossal behemoth companies. Egos are too big. Besides, the Ford family doesn’t care about ‘equal’ anything. They just want their money.

      • 0 avatar

        You’re right.
        These mega deals rarely go well.
        Yeah there’s a sh*tload of international travel and expense account dinners.
        And a lot of coordinating meetings with legions of upper middle mgmt.
        But all the PowerPoint slide savings via more volume and combined strategy never seem to really happen.

  • avatar

    I’ve said it before and I’ll say it again: it’s not a question of if but when VW acquires Ford in its entirety.

    I’m certainly no “auto industry analyst”, but everything I’ve seen from Ford tells me the Ford family is done. They want to cash out. Unfortunately, the laws and climate in this country make it far easier and more profitable to push paper around as an investor that to be an industrialist and actually make things. I don’t think the Ford family wants to put up with unions, supplier issues, unpredictable markets, and all the other headaches of actually making things. Other than maybe Bill Ford Jr., they just want to cash out and take their money.

    Obviously they couldn’t sell any meaningful amount of shares in the open market without cratering the price. The only exit for them is to sell out to another company. Enter VW.

    VW would love Ford’s trucks, meaning, the F150. It’s lucrative, and a segment a “foreign” company could never crack, because real ‘Mericans only buy ‘Merican trucks. Seems to me that Hackett is just the hatchet man brought in by the Ford family to tart the company up for sale. First he discontinues passenger cars (because VW doesn’t need those, they have plenty of their own), then general cost-cutting, then firing many of their European employees (VW doesn’t need those, they have plenty of their own), and then cozies up with progressively closer “joint ventures” with VW. If Hackett won’t get the job done quickly enough, they’ll stick Farley in to do it (he’ll get a nice big fat payoff when it happens and seems like the kind of guy more than willing to make it happen). As the closing line to Westworld prophetically said, “Every human relationship can be adjusted with the right amount of money.”

    VW is desperate both for trucks to fill out their product line (and what better truck than the best-selling vehicle in America?), and also to re-brand themselves after dieselgate. To redeem their reputation ‘organically’ would otherwise take years. When they acquire Ford, it happens in an instant, and VW’s products can be sold under the Ford badge. Instant redemption.

    I hope VW decides to at least keep the Mustang. Though, between the coming Mustang Mach-E abomination, and the bile I can already taste in the back of my throat at the idea of “Mustang by VW”, maybe not.

    • 0 avatar

      ^^This is a good post.

      • 0 avatar

        Thanks! But I wish I was wrong. I’ve been a ‘Ford guy’ since my first car in 1974, a ’65 Mustang convertible. It would be such a shame to see an iconic, storied name like Ford disappear (being a sub-brand of VW, “Ford by VW” doesn’t count).

        But, it’s the Ford family’s company. They’re free to do whatever they want with it. The bigger shame of it all is that over the past few decades, all the regulations and the very culture of this country has moved to make it so much easier to make a lot more money by trading stocks than to actually *make* something. There are so many tax advantages and other loopholes that favor ‘investors’ over ‘industrialists’. It prioritizes making a quick buck over actually building long-term value. The real culprit is the US government that has created this kind of lopsided regulatory structure, and made “maximizing shareholder value” (= make as much money as you can as fast as you can) literally the law of the country. I can’t say that I blame the Ford family, but it will still be a loss.

        The industrial capabilities of this country used to be the envy of the world. Now, go to any store and try to buy something, almost anything, that isn’t made in China. We kid ourselves and say we’ve transitioned to a “service” economy. Who exactly do service providers ‘service’? They ultimately service manufacturers, who increasingly are now in China or elsewhere, but unfortunately not here. Take a look at the growth rates of the Chinese vs US economies (recent COVID-19 global pandemic recession notwithstanding) to see what works better over the long run, actually making things, or electronically shuffling paper.

    • 0 avatar

      So what you are saying is that I should buy about 10 grand of Ford stock now??

      • 0 avatar

        One of my finance professors in business school once wisely said, “The stock market is a great place to make a small fortune – out of a much larger one.”

        Most acquisitions happen at a price premium to the then-market price (30-40% seems to have been a common rule of thumb, enough of a bump to convince people to tender their shares). But no one can predict what will happen to the stock price between now and then. Ford stock closed today at $6.81. With the inexorable grind of a global recession due to the COVID-19 virus, who knows what the stock price will do in the future, or when VW will decide to press forward. The price might drop to $3 or $4, and VW could come in as a ‘hero’ and offer $6. That would be a nice premium to the price at the time, but not such a great deal if you bought the stock today at $6.81.

    • 0 avatar

      Ford cancelling cars and firing employees actually works against Ford in a merger/takeover situation. It’s much better to have these redundant costs around so the analysts can point to things that can be eliminated – in the naive belief that these cost reductions will magically fall to the bottom line.

      VW has shown a masochistic tendency to throw endless amounts of money at North America – with very little to show for it. Too bad Ford didn’t take an offer from VW a decade or 2 ago.

  • avatar
    SCE to AUX

    “distinct, highly capable autonomous-vehicle businesses”

    Maybe the AI group can hire some of VW’s coders to help them.

  • avatar

    “the two auto giants inking a deal for the joint development and construction of a range of products.’

    What’s with all of the talk of a merger or VW buying Ford ? All I’m seeing is a joint venture. Ford had a joint venture with GM for transmissions. They still remain separate companies.

  • avatar

    Union will probably happen but resultant products will have to work for market share in the US.

    From basic operations management. Overall reliability of a two part mechanism.

    Part 1 70% reliable. Part 2 80% reliable. Formula = 0.8 X 0.7 = .56
    Mechanism 56% reliable.

    Plug in any numbers you want but the end reliability is never greater than the weakest part.

  • avatar

    A “collaboration” is just that. Not a buyout, merger, acquisition, takeover, take down, sellout, etc.

    Like what “Run-D.M.C.” did with “Aerosmith”. Or Anthrax/Public Enemy. They came together, playing off each other’s strengths/talents and totally different audience.

    Why would it mean an end to the Mustang? The F-150 isn’t getting “badge engineered” for anyone.

    But as an automaker collaboration, could there be any better?

  • avatar

    VW does not want to integrate toxic company culture from Ford. Culture wars at merged company may bring both of them down. Just look what happened with Renault-Nissan alliance. And they did not even merge yet, and never will.

    Article only mentions cooperation in developing some products to save money.

  • avatar

    VW does not want to integrate toxic company culture from Ford. Culture wars at merged company may bring both of them down. Just look what happened with Renault-Nissan alliance. And they did not even merge yet, and never will.

    Article only mentions cooperation in developing some products to save money.

  • avatar

    I don’t see anything that says they are getting closer, they just released more details about the already announced projects. Ford is giving VW a small truck and a large van to slap a badge on while Ford will slap a badge on a VW small van. Ford will also use the VW EV platform for a euro offering.

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