Ford Motor Co. and Volkswagen AG announced on Tuesday they’ll be joining forces on commercial vans and pickups while they also explore the possibility of a partnership on self-driving and electric vehicles.
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Shares of both companies rose slightly on the news.
“It will improve our competitiveness globally,” Herbert Diess, the CEO of Volkswagen, said during a conference call. “I believe the same is true for Ford.”
The tie-up – announced in the midst of the Detroit Auto Show – will not include a merger or equity stakes, the companies said, but will instead be governed by a joint committee that’s headed by both companies’ CEOs.
It will start with the development of commercial vans and medium-sized pickups for the global markets, according to Ford CEO Jim Hackett, expected to hit the markets as early as 2022.
Ford will build the medium-sized pickups for both companies, as well as the larger commercial vans for European customers, according to Hackett. Volkswagen, meanwhile, will develop and build a city van. The vehicles will have their own unique branding.
Hackett said the second-biggest automaker in the U.S. will provide more information about how the alliance will affect its operations in coming weeks, but said he does not expect any job cuts in Ford plants. Last week, Ford said it would cut thousands of jobs and potentially close factories in Europe in order to cut costs in a region it’s struggled in for years, according to Bloomberg.
VW, meanwhile, said that as a result of the initiative, it will invest $800 million toward the expansion of a plant in Chattanooga, Tennessee, that will manufacture electric vehicles. Europe’s biggest automaker also said it would create about 1,000 new jobs.
Ford and VW also signed a memorandum of understanding, and started to explore opportunities to investigate collaboration on autonomous vehicles, mobility services and electric vehicles. They also said there’s the possibility of additional vehicle programs in the future.