Volkswagen, Ford to announce the Automotive Alliance

DETROIT (Reuters) – Volkswagen AG ( VOWG_p.DE ) and Ford Motor Co ( UN ) are expected to uncover an alliance on Tuesday combining forces on commercial vehicles and likely Expanding to the common development of electric and self-propelled technology, moving meant to save car manufacturers billions of dollars.

President and CEO of Ford Motor Company Jim Hackett, Volkswagen CEO Herbert Diess represents the North American International Auto Show in Detroit, Michigan, USA January 14, 2019. REUTERS / Ben Klayman

Ford and VW will announce their partnership with the backdrop of the Detroit car exhibition, CEO Managing Director Herbert Diess told reporters on Monday. The companies in recent months have discussed cooperation in vans and other vehicles and have said that any extended alliance would not involve merger or equity items.

They have planned a common conference call at. 08:30 EST (1330 GMT) to provide an update on the status of the proposed collaboration.

The two car manufacturers have explored closer cooperation as trade frictions forcing car manufacturers to think about where they build cars to Europe, the US and China.

The expanding alliance highlights the growing pressure on all global automakers to deal with the cost of developing electric and self-propelled cars, as well as technology required to meet tougher emission standards for millions of cars they will sell over the years to come.

The decline in the world's largest auto markets – China and the United States – has taken the pressure to cut costs.

The scope of the VW-Ford alliance was still established in front of the car show, as the talks covered cooperation in electric and autonomous cars.

The alliance framework is expected to include the collection of resources in autonomous technology and VW investing in the Ford business, and Ford's licensing of Volkswagen's MEB vehicles, sources say.

Volkswagen's Diess confirmed at the Detroit Motor Show on Monday that the Alliance will include VW to access Ford's midsize Ranger pickup truck platform.

In June 2018, Ford and VW revealed talks about an alliance in commercial cars and let them look at other joint ventures.

Leaders with both companies have talked about possible savings of a deeper alliance, and VW officials have spoken openly about building their cars in Ford facilities, and Ford uses the German automaker's electric vehicle platform.

Relationship with Volkswagen acts as a major effort for Ford's CEO Jim Hackett since he took over in May 2017 from the expressed Mark Fields mandated to increase decision making and reduce costs. Some analysts and investors have been frustrated by Ford's stock market share and a perceived lack of details from Hackett about Dearborn, Michigan-based automaker's $ 11 billion revenue.

Last year Ford said it would cut thousands of jobs, interrupt the construction of money and lose vehicles and look at closing facilities as part of a reverse effort for the troubled European business.

Reporting by Ben Klayman in Detroit and Jan Schwartz in Detroit; Editing by Peter Henderson and Matthew Lewis

Our Standards: Thomson Reuters Trust Principles.

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