Industry News: Volkswagen Could Use Ford's Plants in the U.S. To Build Vehicles

[William Maley]

Back in June, Ford and Volkswagen signed a Memorandum of Understanding for a new alliance that would focus on commercial vehicles. Since then, the two companies have been in discussions about it and there have been various rumors flying about. Yesterday, Volkswagen CEO Herbert Diess added some more fuel to the fire.

Speaking to reporters outside of the White House, Diess revealed that the German automaker is interested in using Ford's plants in the U.S. to build vehicles.

"We might use Ford capacity here in the U.S. to build cars for us," said Diess.

“We need additional capacity here in the United States, we need an additional car plant for VW and Audi combined.”

The company is in "quite advanced negotiations in Tennessee" about a new plant in the state - Volkswagen operates one in Chattanooga for the Passat and Atlas. But Diess did say "there might be other options as well," most likely talking about using some of Ford's plants in the U.S.

For now, this is an idea being floating out there. The two are continuing their talks about what this alliance will look like. Diess said more details would come out in January.

Source: Automotive News (Subscription Required)

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[G. David Felt]

Makes total sense as it would also help Ford out with under utilized manufacturing and could reduce the estimated 25,000 layoffs that the financial world says is coming with Fords $11 Billion restructuring.

[riviera74]

The layoffs will still happen, especially if Ford sells the plants to VW/Audi. This may well be more about cutting costs in Germany than just having vehicle capacity in the USA.

[A Horse With No Name]

49 minutes ago, riviera74 said:

This may well be more about cutting costs in Germany than just having vehicle capacity in the USA.

VW needs to have saleable product to need Fords production capacity. Subaru took over the market for funky cars  for hipsterish people over a decade ago and never looked back. Golf sells in Tiny numbers here, huge in Europe. VW already has Puebla and Chattanooga. Their chance of needing more production capacity is dismal.

Outside of a very few vehicles, very little is built in Germany for the US market IIRC,

49 minutes ago, riviera74 said:

The layoffs will still happen,

UAW is going to soon equal Unknown Auto Workers.

1 hour ago, dfelt said:

Makes total sense as it would also help Ford out with under utilized manufacturing and could reduce the estimated 25,000 layoffs that the financial world says is coming with Fords $11 Billion restructuring.

More layoffs will follow.

Edited December 5, 2018 by A Horse With No Name

[A Horse With No Name]

Does this union remind anyone else of the union Between Sears and K-mart.,..two companies in trouble that ended up feeding off of each others misery?

[Drew Dowdell]

2 hours ago, A Horse With No Name said:

Does this union remind anyone else of the union Between Sears and K-mart.,..two companies in trouble that ended up feeding off of each others misery?

No. Sears and K-Mart actually merged to become a single company. 

This is actually a smart move by VW and it works out for Ford.  It's a way to get around Trump Tariffs while also not committing billions to build another plant in the US. Ford gets some financial relief from the burden of running these plants.  I actually expect these types of arrangements to become more common. 

Purely a speculative example based on no evidence, but Benz could contract with GM to build E-Classes in Hamtramck to get around the tariff. Or BMW using Lordstown to build 3-series.  It would help both companies involved. 

[A Horse With No Name]

6 minutes ago, Drew Dowdell said:

No. Sears and K-Mart actually merged to become a single company. 

This is actually a smart move by VW and it works out for Ford.  It's a way to get around Trump Tariffs while also not committing billions to build another plant in the US. Ford gets some financial relief from the burden of running these plants.  I actually expect these types of arrangements to become more common. 

Purely a speculative example based on no evidence, but Benz could contract with GM to build E-Classes in Hamtramck to get around the tariff. Or BMW using Lordstown to build 3-series.  It would help both companies involved. 

Tesla should do this. GM knows much more about building cars than Tesla.

[Drew Dowdell]

5 minutes ago, A Horse With No Name said:

Tesla should do this. GM knows much more about building cars than Tesla.

Tesla sorta did.  Their plant in California is the old Toyota-GM joint site called NUMMI and Telsa got (some) advice from Toyota on building electric cars. 

[A Horse With No Name]

14 minutes ago, Drew Dowdell said:

Tesla sorta did.  Their plant in California is the old Toyota-GM joint site called NUMMI and Telsa got (some) advice from Toyota on building electric cars. 

I know about that....was thinking that a Tesla-GM indirect partnership might pay off.

[ccap41]

Just now, A Horse With No Name said:

I know about that....was thinking that a Tesla-GM indirect partnership might pay off.

If it's only for a plant for production, yeah. If it's anything more, there's nothing in it for GM. Tesla's patents are all public. 

[Drew Dowdell]

Just now, ccap41 said:

If it's only for a plant for production, yeah. If it's anything more, there's nothing in it for GM. Tesla's patents are all public. 

If it kept the lights on at Hamtramck, GM might also be able to build something else there profitably. 

[G. David Felt]

17 minutes ago, Drew Dowdell said:

Tesla sorta did.  Their plant in California is the old Toyota-GM joint site called NUMMI and Telsa got (some) advice from Toyota on building electric cars. 

Clearly Musk did not listen as he still wanted to roboticize in a way not done by the OEMs. That really seems to have mucked him up.

[ccap41]

1 minute ago, Drew Dowdell said:

If it kept the lights on at Hamtramck, GM might also be able to build something else there profitably. 

I'm all for keeping jobs around so if the theoretical "merger" were a thing, it would be great. Hopefully Tesla could take a few more notes on how to assemble vehicles before GM leaves them with the keys to the building. 

[Drew Dowdell]

Just now, ccap41 said:

I'm all for keeping jobs around so if the theoretical "merger" were a thing, it would be great. Hopefully Tesla could take a few more notes on how to assemble vehicles before GM leaves them with the keys to the building. 

I think you're confusing merger with a partnership.  Ford and VW would still be independent of each other, they would just share a workspace for assembling vehicles.  Like how Toyota and GM did with NUMMI (Corolla/Prism/Matrix/Vibe).  And Subaru and Toyota at Lafayette (Legacy / Camry)

[ccap41]

1 minute ago, Drew Dowdell said:

I think you're confusing merger with a partnership.  Ford and VW would still be independent of each other, they would just share a workspace for assembling vehicles.  Like how Toyota and GM did with NUMMI (Corolla/Prism/Matrix/Vibe).  And Subaru and Toyota at Lafayette (Legacy / Camry)

Yes! I just couldn't think of the word, LOL ??‍♂️. That's why I quoted it because I knew it wouldn't be a merger(in theory). 

Edited December 5, 2018 by ccap41

[A Horse With No Name]

11 minutes ago, Drew Dowdell said:

If it kept the lights on at Hamtramck, GM might also be able to build something else there profitably. 

Exactly. And it might keep Tesla profitable...they seem to have a lot of production issues.

[G. David Felt]

17 minutes ago, A Horse With No Name said:

Exactly. And it might keep Tesla profitable...they seem to have a lot of production issues.

But ya know Musk is the smartest person in the room and it would be a cold day in hell before he would snuggle up to Barra to have a joint manufacturing where they actually built a consistent auto and quickly off the assembly line.

[A Horse With No Name]

20 minutes ago, dfelt said:

But ya know Musk is the smartest person in the room and it would be a cold day in hell before he would snuggle up to Barra to have a joint manufacturing where they actually built a consistent auto and quickly off the assembly line.

A legend in his own mind, yes.