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Ford, VW alliance may create the cars of the future

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 10:17 AM


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 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: 255125

Reported Deaths: 5574
CountyCasesDeaths
DeSoto17257180
Hinds16331322
Harrison13567194
Rankin10804212
Jackson10453184
Lee8864141
Madison8314164
Jones6434112
Forrest6009120
Lauderdale5902186
Lowndes5405116
Lafayette499193
Lamar488565
Washington4803124
Bolivar3997109
Oktibbeha395381
Panola372379
Pontotoc367853
Monroe3558105
Warren354898
Union345960
Marshall344066
Neshoba3396152
Pearl River3301100
Leflore3041107
Lincoln298085
Sunflower286671
Hancock274459
Tate273162
Alcorn265453
Itawamba263759
Pike263778
Scott248046
Yazoo247056
Prentiss246552
Tippah243050
Copiah242749
Coahoma241054
Simpson236467
Leake231765
Grenada219471
Covington214672
Marion213073
Adams207070
Wayne202932
Winston201666
George199839
Attala194259
Newton193444
Tishomingo189361
Chickasaw185044
Jasper172736
Holmes168767
Clay159833
Stone144721
Tallahatchie141934
Clarke139862
Calhoun136521
Smith121424
Yalobusha117834
Walthall112336
Noxubee110822
Greene110429
Montgomery109834
Carroll104821
Lawrence102917
Perry102631
Amite98426
Webster92824
Tunica87321
Claiborne86625
Jefferson Davis85326
Humphreys83124
Benton82023
Kemper77620
Quitman6968
Franklin66715
Choctaw60913
Wilkinson58725
Jefferson54919
Sharkey43117
Issaquena1596
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Alabama Coronavirus Cases

Cases: 426543

Reported Deaths: 6126
CountyCasesDeaths
Jefferson62752920
Mobile30551554
Madison27303186
Tuscaloosa20835267
Montgomery19192305
Shelby18693114
Baldwin16513183
Lee12603101
Morgan12321113
Etowah11805168
Calhoun11206200
Marshall10236107
Houston8681148
Cullman8094105
Limestone807474
Elmore7923101
DeKalb771597
Lauderdale763183
St. Clair7599120
Talladega6224108
Walker5930174
Jackson583741
Colbert535473
Blount532083
Autauga522755
Coffee446256
Dale399781
Franklin368148
Chilton337865
Russell335910
Covington330168
Escambia321342
Dallas305196
Chambers288669
Clarke283133
Tallapoosa2630107
Pike251329
Marion247350
Lawrence245247
Winston229035
Bibb217047
Geneva203335
Marengo200829
Pickens196931
Hale177442
Barbour173836
Fayette171226
Butler170758
Cherokee160930
Henry155021
Monroe147317
Randolph141535
Washington138326
Clay127045
Crenshaw120244
Cleburne118423
Lamar118419
Macon116835
Lowndes111535
Wilcox103621
Bullock99728
Perry98219
Conecuh95120
Sumter89526
Greene76223
Coosa60515
Choctaw51524
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