Volkswagen AG and Ford Motor Company announced more details for their alliance that combines their resources to build commercial vans and pickups. Both companies held a joint conference call during the Detroit Auto Show Tuesday, offering more details on the joint venture. Both companies had also previously invested heavily into self-driving and electric vehicle technology before today’s announcement. Reports suggest the tie-up between the two companies will save both billions in development costs moving forward. We first heard about the Ford/Volkswagen alliance for commercial vehicles back in June 2018, and both companies have since added they’re considering other joint projects.
Volkswagen and Ford’s CEOs both committed to joint development of commerical vans for global markets. Ford will contribute medium-sized commercial vans and medium-sized pickups as early as 2022. Volkswagen will develop a city van, as well as introduce its MEB electric platform to its U.S. production facility in Chattanooga, Tennessee in 2022. According to both companies, any products stemming from the alliance will maintain “identity and independence.” At this point, there are no plans for equity stakes of one company in the other.
Plan for Pickups
On the “medium-sized pickups” front, Ford CEO Jim Hackett confirmed Ford would build trucks for both companies. That corroborates an earlier report that the next-generation Volkswagen Amarok may be built on a Ford Ranger platform. However, Volkswagen CEO Herbert Diess said in answering questions from reporters that it’s too early to get into specifics as to whether production of current vehicles — take the Amarok, for instance, built in Argentina — will shift to the United States.
Ford clarified later in the call that this agreement applies to South American, African and European markets only. Whether the joint venture will expand to the U.S. market is not on the docket yet.
Vehicles will ‘arrive by 2023’
According to Diess, vehicles will start arriving under this plan in 2023. However, since both companies are announcing they’ve come to terms, that time frame can change. Volkswagen also recently announced an $800 million into its Chattanooga plant to develop electric vehicles. That investment, Diess claims, will create approximately 1,000 jobs in the area.
The cooperative move with Volkswagen comes at a time when Ford CEO Jim Hackett, who took over the post in 2017, faces pressure to cut costs and speed up the company’s decision making processes. To that end, he has pitched Ford into an $11 billion restructuring plan over the coming years. At this time, Hackett stressed there will not be any plant closures in the United States as a result of the alliance with Volkswagen. He went further to say, “In these changing times must also come the evolution of these new technologies (autonomous and electric vehicles) and capabilities that vehicles are going to be asked to deliver.”
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