Updated: A Ford and Volkswagen Merger is Not Going to Happen
There is potential for a strategic alliance, thoughby Sidd Dhimaan, on
Ford and Volkswagen had signed the Memorandum of Understanding earlier this year that laid the foundations of a strategic partnership between the two. But what started off as an alliance to focus on jointly developing an array of commercial vehicles, has turned into rumors of a full-fledged merger.
Updated 10/23/2018: Ford has reached out to us directly and has provided new information regarding a supposed merger. According to Jennifer Flake, from Ford Communications, "If the talks proceed fully, this would be a strategic alliance - full stop. There is no potential merger."
This Is Not What It Was Supposed To Lead To
Ford and Volkswagen joined hands to develop commercial vehicles that would benefit both as they have a scarce presence.
Back in June, the two automakers also said that they will work to “better serve the evolving needs of customers.”
However, according to some industry specialists, this could mean that Ford and Volkswagen are evaluating a full-fledged merger or an equity swap, which could form the largest single company in the industry.
Why Not, If It Helps Both The Brands
According to The Detroit Bureau, this partnership could well extend beyond just developing commercial vehicles. Taking their relationship to the next level could very well be beneficial for both the automakers.
Volkswagen could expand its base in the States again, which spiraled down after the Dieselgate, whereas Ford could use some help in Europe, Latin America, and China, where it’s not got a strong footing.
Likewise, Volkswagen could capitalize on Ford’s expertise in the SUV and truck segment, and the Blue Oval could get a lesson or two in electrification. Not to mention, the two automakers could share platforms and widen their portfolio to throw the competition out of the water. Some sources also suggest that the talks are already going on, and this could be the best time for them to sign the dotted lines.
All We Had To Do Was Connect The Dots
Although Ford is not addressing these potential rumors, Jim Farley, Ford’s president of Global Markets said when the automakers announced the MoU, “This potential alliance with the Volkswagen Group is another example of how we can become more fit as a business, while creating a winning global product portfolio and extending our capabilities.” The goal would be “to improve our effectiveness and efficiency.” So, there was a hint all this while.
Ford Needs This To Happen At The Earliest
It’s not all hale and hearty for Ford these days. As the CEO, Jim Hackett said, Ford is working on “radical” transformation of the company.
This has to do with the trade war between U.S. and China which wiped $1 Billion off Ford’s profits, and also the massive lay-off.
We can already see the transformation happening as Ford has already castrated coupes and sedans from its portfolio in the United States and is pushing into electrified and autonomous vehicles combined with a massive expansion in the pickup, crossover, and SUV segments.
According to you, is this what we can call a holy matrimony or just a classic case of ‘friends with benefits’? Share your thoughts with us in the comments section below.
Read more on the Dieselgate scandal.