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Ford, VW promise more details on auto giants' alliance

Ford and Germany's Volkswagen on Tuesday morning will disclose some details of their planned alliance, top officials with both companies said Monday at the Detroit auto show

The companies scheduled a joint conference call for 8:30 a.m. EST, with Volkswagen AG CEO Herbert Diess and Ford CEO Jim Hackett "to provide an update on the companies’ ongoing discussions regarding a global alliance."

Both Diess and Bill Ford, executive chairman of the automaker his great-grandfather founded, told the Free Press on Monday that talks are continuing but the companies have considerable opportunities to collaborate. 

"The talks are going really well. We’re going to have more to say later this week. Stay tuned," Bill Ford said after the company unveiled the 2020 Mustang Shelby GT500, a new Police Interceptor and an Explorer ST.

“We’re still actually in final discussions,” he said. 

Diess, speaking after the introduction of the new Passat sedan, said, "We love to work together with the Ford guys. They are really serious and professionals."

Ford Motor Co. Executive Chairman Bill Ford Jr., center, sits between executives watching a virtual reality experience before the reveal of the all-new 2020 Mustang Shelby GT 500 during the 2019 North American International Auto Show held at Cobo Center in downtown Detroit on Monday, Jan. 14, 2019.

He appeared to confirm a commercial truck collaboration, which is where discussions between the companies started in June. 

"Volkswagen is a really big car company worldwide, a big car company, but we are not as big in small commercial vehicles," Diess said. Ford is strong in trucks, "so we decided to join forces there. And we will become very, very competitive together in this segment — which consists of small commercial vans and small and midsize pickup trucks."

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Numerous reports have said discussions evolved from commercial vehicles to electric and autonomous vehicle research, and both Diess and Hackett have hinted at shared production. 

Diess, who raised the possibility last month that VW could build cars in U.S. Ford plants with UAW workers, told the Free Press on Monday: "It's too early to announce. We have a press meeting tomorrow. We'll announce more and want to announce it together."

He added: "We are really strong in Europe and China, probably not as strong in the United States so we are very complementary — Ford and Volkswagen. More tomorrow.

"Partnership is very often about economies of scale in our industry. As I said, we are big, but there are segments where it makes sense to work together. ... Combining forces would strengthen Ford and Volkswagen."

When asked if Volkswagen might one day build vehicles in Ford factories, Diess said, "It might be a possibility in the future."

Specifically asked about building Audi in the U.S., he said, "This is under consideration. Not yet decided."

Volkswagen Group CEO Herbert Diess answers questions during a private roundtable at the 2019 North American International Auto Show held at Cobo Center in downtown Detroit on Monday, Jan. 14, 2019.

Bill Ford said: “There is a very strong future for manufacturing in North America. We are a global company. That won’t change.”

Investors and industry analysts continue monitoring events with interest.

"The Volkswagen-Ford partnership is emblematic of what we are seeing in the industry," said Michelle Krebs, executive analyst for Autotrader. "While we are moving toward a world of electric vehicles, autonomous vehicles and mobility services, we don’t know when they will take hold.

"In the meantime, automakers are spending massive amounts of money with no clear path to turning profits. VW and Ford can share costs, as GM and Honda are doing on autonomous vehicles, for instance. I expect we will see more of such partnerships between automakers and automakers with tech companies."

In addition to all the recent developments revealed so far, Scott Keogh, president and CEO of Volkswagen Group of America, indicated there's more to come.

When asked if VW planned to set up battery production close to its factories, which eliminates issues related to safe battery transportation, Keogh told the Free Press, “There will be an announcement soon.”

Keogh said Volkswagen is "setting up strategically for local sourcing."

Hackett and Diess are to be joined on Tuesday's call by Jim Farley, Ford's president of Global Markets, and Thomas Sedran, CEO of Volkswagen Commercial Vehicles.

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