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April 13, 2010

US: Ford cautious on alliances, open to green partnerships

Ford is open to partnerships in green car technology but will be cautious in committing to any alliance, executive chairman Bill Ford was quoted as saying on the sidelines of the Fortune Brainstorm Green conference.

Ford is open to partnerships in green car technology but will be cautious in committing to any alliance, executive chairman Bill Ford was quoted as saying on the sidelines of the Fortune Brainstorm Green conference.

“We are always open to it but I think we will be careful before we jump,” Bill Ford said in an interview with Reuters at the event in California.

“You always go into the joint venture with the premise that you will save money and save manpower, and our experience often has been that it does neither.”

Ford has just negotiated a sale of Volvo Cars to Geely for US$1.8bn after paying almost $6.5bn for the unit in 1999 while Daimler unwound its money-losing merger with Chrysler in 2007 and took a loss of more than $30bn on the transaction.

Ford said partners heading into any alliance needed to have clear agreement on the division of work and the ownership of any intellectual property created by the partnership.

“I am not saying every joint venture is bad,” he said. “But you have to be very thoughtful and really have very clear expectations.”

Ford also has partnerships outside the auto industry, such as the one with Microsoft , which provides Ford with the acclaimed Sync voice-recognition technology and has recently added a software system to manage home recharging of electric cars.

Ford told the news agency the automaker was pushing ahead with its electric vehicle strategy but was not yet convinced that battery-powered vehicles will be the dominant response to tougher fuel efficiency and emission standards.

“It’s too early to declare the winners and losers,” he said. “Certainly, we are betting heavily on electrics.”

He also said Ford could boost production of electric cars quickly if demand were to spike.

Ford’s electric vehicle strategy includes introducing a battery-powered version of its Turkish-built Transit Connect compact work van and an electric version of its Focus sedan next year.

“We won’t be a laggard with the technology,” he said. “We are pushing hard on it. Who knows what the volume is.”

“We will be a leader if big numbers materialise but our whole (modus operandi) these days is not to overpromise on anything,” he added.

Reuters noted that Ford, who was CEO of the automaker from 2000 to 2006 before recruiting Allan Mulally from Boeing, faced criticism during his tenure for pledging a sweeping rollout of hybrid vehicles that the automaker was unable to deliver.

Now, he said, the auto industry was moving faster toward adoption of alternative fuel and renewable power technology, a trend he said could gain momentum if petrol prices moved higher in an “orderly” way.

“I am really energised by the fact that we are really at the dawn on a new age in the auto industry,” he added. “I have never been this energised by what I see happening to Ford and also to the industry.”

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