Ford, VW work toward announcing alliance at Detroit auto show


Everything you need to know before the 2019 North American International Auto show kicks off in Detroit in January. Tanya Wildt, Detroit Free Press

Ford and Volkswagen are working toward making a major announcement during the Detroit auto show on Jan. 15, people close to months-long talks about an alliance between the two automakers confirmed Wednesday.

Sources in the U.S. say the situation is fluid but hopeful. “Nothing is definite,” a person familiar with the discussions told the Free Press.

The North American International Auto Show media schedule lists a “pending industry announcement” for Tuesday morning at the Cobo Center Atrium stage.

Volkswagen and Ford have been talking since summer about areas of potential cooperation. The companies “will unveil a deeper alliance” during the show “that goes beyond cooperating in the area of commercial vehicles,” the original area of talks, two sources familiar with the plan told Reuters.

The auto companies agreed not to discuss anything publicly this week, sources told the Free Press.

“Our memorandum of understanding with VW covers conversations about potential collaborations across a number of areas,” said Ford spokeswoman Jennifer Flake. “It is premature to share additional details at this time. We look forward to sharing an update soon.”

More: Ford was offered Volkswagen for free after WWII — and passed

Volkswagen spokesman Mark Clothier declined to comment, saying the Wolfsburg, Germany, company policy prohibits speculative discussion.

“A global alliance is expected,” an anonymous source told Reuters in the story datelined from Hamburg, Germany, and Detroit.

Multiple sources told the Free Press that breadth and details of the expected alliance are still not final, though ongoing talks have included a cost-cutting partnership involving electric and driverless technology.

Both Ford and VW sources have said in recent months that talks are proceeding as hoped. The companies also have said any partnership won’t be a merger or include equity stakes.

“Volkswagen is reviewing whether to invest in Ford’s autonomous vehicles division, while Ford executives are considering licensing Volkswagen’s MEB electric vehicles platform,” Reuters reported.

‘Big, bold move’

News of a potential announcement won praise from industry analysts.

“This is a very big, bold move,” said Charles Ballard, an economics professor at Michigan State University. “The scale of the proposed alliance tells us a lot about the wrenching changes that are being wrought in the industry by trade wars and changes in technology and consumer preferences.”

Jon Gabrielsen, a market economist who advises automakers and auto suppliers, said partnerships are crucial to all serious players moving forward.

“The global auto industry is rapidly becoming one in which major scale is critical,” he said. “Ford’s scale is not large enough and VW has insufficient presence in the U.S. In addition, they each have significant challenges…

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