Volkswagen Group chief executive Herbert Diess has met with President Donald Trump to update him on the status of his company’s talks with Ford over an alliance between the two companies.
He also told Reuters that the alliance could extend as far as Volkswagen utilising capacity at Ford plants to build its cars.
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Diess also said, confirming earlier reports, that the company is considering building a second car plant in the US.
He told the news agency that the VW Group is in ‘quite advanced negotiations and dialog with Ford’ to really ‘build up a global automotive alliance, which also would strengthen the American automotive industry’.
The Reuters report also said that Ford chairman Bill Ford told reporters at an event near Detroit this week that talks with Volkswagen over an alliance are going ‘very well’.
Ford CEO Jim Hackett recently dampened down speculation over the extent of an alliance between the two automotive giants, who have signed an agreement to look into collaborations in commercial vehicles and other areas. However, it now appears that an alliance between the two could be heading into deeper territory as they look to address the major auto industry challenges – and higher costs for advanced technologies – ahead. Sharing some manufacturing capacity and platform engineering could be advantageous for both.
The Reuters report noted that RBC Capital Markets analyst Joseph Spak said in a research note this week that Diess’s comments raised the chances that VW would use some of Ford’s unused capacity as part of a broader partnership. Spak also said that a European or Asian automaker could seek to acquire some of GM’s unused capacity in North America, a development that might strengthen VW’s hand in its talks with Ford.
According to Reuters, Diess also said VW would not take an equity stake in Ford as part of its alliance. “We are building an alliance with Ford which will strengthen Ford’s position in Europe because we will share platforms,” he reportedly said. “We might use Ford capacity here in the US to build cars for us.”
See also:
VW scouting for US EV factory location
Ford CEO cautious on VW relationship
Volkswagen AG, Ford, mull strategic alliance
Is Ford planning 25,000 job cuts?
