SEVERE WX : Fire Weather Watch View Alerts
STREAMING NOW: Watch Now

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 7:32 PM
Updated: Jan 15, 2019 7:59 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."

California Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 796436

Reported Deaths: 15291
CountyConfirmedDeaths
Los Angeles2633336423
Riverside576951173
San Bernardino53121908
Orange525381176
San Diego45425767
Kern31647357
Fresno27944362
Sacramento21800393
Alameda20839395
Santa Clara20648300
San Joaquin20060434
Stanislaus16425342
Contra Costa16156202
Tulare15782257
Ventura12507146
Imperial11658317
San Francisco1090199
San Mateo9664144
Monterey964570
Santa Barbara8952111
Merced8803140
Kings754477
Sonoma7225120
Marin6620114
Solano623260
Madera442465
Placer352343
San Luis Obispo345327
Butte277640
Yolo277355
Santa Cruz22838
Sutter168610
Napa165213
San Benito131411
Yuba11337
El Dorado10784
Mendocino88718
Shasta75114
Lassen7360
Glenn5683
Tehama5294
Nevada5256
Colusa5226
Lake51611
Humboldt4906
Calaveras31414
Amador28716
Tuolumne2264
Inyo18714
Mono1652
Siskiyou1630
Del Norte1381
Mariposa752
Plumas500
Modoc250
Trinity150
Sierra60
Alpine20
Unassigned00
Chico
Scattered Clouds
86° wxIcon
Hi: 87° Lo: 58°
Feels Like: 86°
Oroville
Clear
88° wxIcon
Hi: 87° Lo: 58°
Feels Like: 88°
Paradise
Scattered Clouds
86° wxIcon
Hi: 79° Lo: 57°
Feels Like: 86°
Chester
Clear
73° wxIcon
Hi: 76° Lo: 46°
Feels Like: 73°
Red Bluff
Clear
86° wxIcon
Hi: 85° Lo: 57°
Feels Like: 86°
Willows
Scattered Clouds
86° wxIcon
Hi: 90° Lo: 54°
Feels Like: 86°
Below average temperatures, breezy south winds, and impacted air quality are ahead for today. We'll stay mild on Friday, but much hotter temperatures and high fire danger will return for your weekend.
KHSL Severe
KHSL Radar
KHSL Temperatures

Community Events