New Ford-Volkswagen Partnership Promises New Pickups, But May Cause Conflict

January 16, 2019

By Amanda Weston

Ford Motor Company and Volkswagen AG announced at the Detroit Auto Show they will form a "broad alliance," but the reality of a partnership may present certain conflicts for both companies.

"I think that this is going to be a very difficult friendship to make work because Ford ($F) is expected to make some pickup trucks for Volkswagen, which sounds good because Volkswagen needs those pickups in other markets," Nathan Bomey, business reporter at USA Today, told Cheddar Wednesday.

"The question is what if they end up wanting pickups in America, which is of course where Ford has its bread-and-butter pickups."

Bomey added that both carmakers will need to remain scrupulous about the details.

"And so they're going to have to make sure that they've got the details of this alliance worked out so that they don't step on each other's toes. But it does make some sense because Ford and Volkswagen need to be much more efficient companies, and in that respect they can help each other."

Both CEOs confirmed they plan to develop commercial vans and medium-sized pickups as early as 2022.

The two companies will also explore collaborating on autonomous and electric vehicles and mobility services. They have also said they are considering more advanced vehicle programs.

"If that comes to fruition, then that could certainly help spread out the cost, which they believe is important to end up getting across the finish line," Bomey said.

"This is very, very costly technology. The regulatory structure is going to be very difficult to navigate, and so they may need to partner to do this. And we are seeing other companies partner as well. The problem is that clash of cultures can be very difficult in the auto industry. You look at the history of these types of deals, a lot of times the culture clash just doesn't work out well."

For full interview click here.