Could GM Soon Face A Ford-VW Tie-Up?7
Perhaps the late FCA CEO, Sergio Marchionne, was onto something. He predicted automakers will have to form closer alliances and partnerships as development costs become more redundant and automakers look for ways to share costs. With this in mind, General Motors could soon face a Ford-VW alliance.
The Detroit Free Press reported many industry observers expect a Memorandum of Understanding between the U.S. and German automakers over commercial vehicle development to expand into something much, much larger. Specifically, analysts believe Ford CEO Jim Hackett needs to do something big to survive. So far, Ford’s future strategy has been somewhat unclear.
A theoretical Ford-VW partnership would be mutually beneficial, too. Ford is underperforming in Europe and South America—two areas where VW does quite well. Meanwhile, VW’s utility vehicle sales suffer in the face of Ford’s offerings, and the segment is expected to keep growing. Having access to Ford’s truck and SUV portfolio could be the ticket for the German automaker to enact a Ford-VW tie-up.
Not to mention, Ford’s electrification plans are murky. Rival GM has plans to introduce 20 battery-electric cars globally by 2023, but VW has a dedicated electric-car architecture ready to underpin millions of EVs in the coming years. Ford could also benefit from VW’s electric-car know-how and development.
VW is the largest automaker in the world, and cozying up with Ford could put GM in a tougher spot as both receive mutual benefits from the partnership.
GM itself has begun cozying up to its own partner, though: Honda. The two automakers plan to work together on next-generation electric-car batteries, fuel cell technology and a purpose-built self-driving car. However, Ford and VW’s relationship would likely be much closer. Something akin to what Mr. Marchionne advocated for for years while he was in charge.
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I could see GM and Honda to get more closer… GM could get some tips for the Honda reliability roots amid Honda is kinda starting to get problematic (Looking at you CR-V and Odyssey)
All the more reason that GM vehicles have to be top notch across the board and second to none.
My first reaction is that GM should partner with Honda and even PSA to gain Asian and European exposure.
But then I sense that GM is happy to contract and reduce itself in the expectation that a joint mobility future will lead to over-capacity in manufacturing, when most of what is made will be appliance like modules, ordered via tenders.
Ford is a complete mess and they have no other choice right now. Merging with the VW empire would give VW access to trucks which they don’t have.
GM and Ford are way too small (market cap) to survive on their own and to face the onslaught of Chinese brands about to hit the market. Honda is a good choice for GM. One or two more partners may be needed such as a German brand (BMW) in combination with their Chinese partners which would cover the world markets.
I’m not going to hold my breath on that. Ford is family owned, and even during the great recession, they opted for no gov’t assistance. But just the same, GM and Honda should start entertaining the idea of a partnership in the future right now.
The difference this time is that Ford won’t have a choice. They are dropping in all markets and have bet the farm in China which is turning out to be a complete disaster. Ford is in a freefall.
If the Ford family don’t make a move, they may end up with nothing.
I just don’t see the synergy in a Ford VW collaboration. I think VW and FCA makes more sense.