Ford and Volkswagen partner up

Ford and Volkswagen have signed an agreement to develop commercial vans and medium-sized pickups beginning as early as 2022. CNN's Peter Valdes-Dapena reports.

Posted: Jan 15, 2019 9:39 PM
Updated: Jan 15, 2019 9:59 PM

Ford and Volkswagen announced a long-anticipated plan Tuesday to build vehicles together.

The automakers said they have signed an agreement to develop commercial vans and medium-sized pickups beginning as early as 2022.

The companies also agreed to "investigate" how they can work together to develop next generation vehicles, such as electric and self-driving cars.

Both companies also said they were open to considering additional vehicle programs in the future.

The auto industry is racing to develop new technologies and vehicles. Companies are looking for ways to free up billions of dollars to spend on development.

Ford has said it anticipates spending $11 billion restructuring its business in the coming years, while VW has announced that it will spend €44 billion ($50 billion) by 2023 on an "electric offensive" to develop electric cars, self-driving vehicles and other new technology.

"You can't do this alone," said Ford CEO Jim Hackett at a joint appearance Tuesday. "All these efforts will be enhanced by sharing brainpower."

"It is no secret that our industry is undergoing fundamental change, resulting from widespread electrification, ever stricter emission regulation, digitization, the shift towards autonomous driving, and not least changing customer preferences," said Volkswagen CEO Herbert Diess. "In such an environment, it just makes sense to share investment, pool innovation capabilities and create scale effects in clearly defined areas."

While the two companies will share some production plans, Hackett said he does not anticipate any work force reduction in any Ford plants as a result of this alliance.

The two companies have been transparent about their talks, which began early last year. The automakers complement each other fairly well.

Volkswagen sold a record 10.8 million vehicles last year, making it one of the largest automakers in the world. But only about 1% of those are electric vehicles.

It does have a strong business in minivans, but not commercial vans or pickups. Ford brings strength in those areas. It also has only a sliver of the US market, the world's No. 2 car market behind China. VW also owns the luxury car brand Audi, as well as Porsche and Skoda,

Ford is a major player in the US market, second only to GM in terms of sales. But it is not as successful overseas It struggles to make a profit in Europe where VW is dominant. Ford has a very strong lineup of pickup trucks and SUVs. Its F-150 ihas been the best selling US vehicle for more than 40 years. But is essentially dropping traditional sedan sales in the United States in the coming years, while VW is still very strong in sedans.

Both have limitations on how close an alliance they can form. A formal merger was always unlikely, if not impossible, because of the unique nature of each company's ownership structures.

Two classes of stock at Ford give the descendants of founder Henry Ford effective control of the automaker. His great-grandson, Bill Ford Jr., is the current chairman of the company and it's clear the Ford family is unwilling to give up that control. Volkswagen has about 20% of its shares owned by the German state of Lower Saxony, where it is based.

Analysts expressed some disappointment during the call because the two sides weren't ready to announce a more definitive agreement on electric and self-driving cars. The two company chiefs assured them that they are moving in that direction, but that it's not as simple to work out the details as it appears from the outside.

"It's hugely complex. It's really tough job," said Diess about a decision on electrics and self-driving cars.

"This is a new world in how people work together," said Hackett. "We fully expect, Herbert and I, for these [talks] to be very successful."

Mississippi Coronavirus Cases

Data is updated nightly.

Cases: 307332

Reported Deaths: 7095
CountyCasesDeaths
DeSoto20757248
Hinds19869408
Harrison17475302
Rankin13307275
Jackson13095243
Madison9886210
Lee9854169
Jones8289160
Forrest7522146
Lauderdale7185237
Lowndes6261144
Lamar610284
Lafayette6026117
Washington5279132
Bolivar4769129
Oktibbeha455297
Panola4440103
Pearl River4418139
Warren4277118
Marshall4267100
Pontotoc416472
Monroe4056132
Union403575
Neshoba3984176
Lincoln3869107
Hancock371985
Leflore3468124
Sunflower329389
Tate322681
Pike3177104
Scott310472
Yazoo304268
Alcorn297664
Itawamba296776
Copiah292965
Coahoma289677
Simpson287484
Tippah284668
Prentiss275659
Marion265679
Wayne261341
Leake260973
Grenada254882
Covington254380
Adams245882
Newton244859
George237647
Winston225981
Tishomingo222067
Jasper219748
Attala213273
Chickasaw204857
Holmes186471
Clay182354
Stone179131
Clarke176676
Tallahatchie175240
Calhoun163130
Yalobusha158636
Smith158534
Walthall130543
Greene129433
Lawrence126223
Noxubee125833
Montgomery125542
Perry125138
Carroll120826
Amite119941
Webster113432
Jefferson Davis105332
Tunica102525
Claiborne101330
Benton97225
Kemper95126
Humphreys94332
Franklin81723
Quitman78916
Choctaw72817
Jefferson64828
Wilkinson64727
Sharkey49617
Issaquena1686
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Alabama Coronavirus Cases

Cases: 518588

Reported Deaths: 10712
CountyCasesDeaths
Jefferson753351487
Mobile37698798
Madison33829494
Tuscaloosa25245443
Montgomery23942565
Shelby23094238
Baldwin20617300
Lee15510165
Calhoun14277311
Morgan14137268
Etowah13660345
Marshall11952219
Houston10379278
Elmore9988200
Limestone9806147
Cullman9467188
St. Clair9422234
Lauderdale9208227
DeKalb8745181
Talladega8042171
Walker7087275
Jackson6753110
Autauga6715103
Blount6480135
Colbert6200130
Coffee5397112
Dale4766110
Russell428238
Franklin419882
Chilton4080109
Covington4053114
Tallapoosa3892146
Escambia387574
Dallas3526149
Chambers3499122
Clarke346360
Marion3065100
Pike305475
Lawrence295295
Winston272272
Bibb256258
Marengo248561
Geneva245875
Pickens232959
Barbour224755
Hale218675
Butler212266
Fayette208960
Henry187844
Cherokee182044
Randolph176741
Monroe171240
Washington163838
Macon154348
Clay149354
Crenshaw149257
Cleburne146041
Lamar139234
Lowndes136453
Wilcox124327
Bullock121340
Conecuh109028
Perry107926
Sumter102932
Coosa99228
Greene90734
Choctaw58624
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