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Ford and Volkswagen will build commercial vans and pickup trucks together in new partnership

Key Points
  • The companies announced the agreement on the second day of the North American International Auto Show in Detroit.
  • The partnership is expected to boost annual pre-tax operating results starting in 2023.
  • They also signed a "memorandum of understanding" to work together on autonomous vehicle research.
14 January 2019, US, Detroit: Jim Hackett (r), CEO of Ford, and Herbert Diess, CEO of VW, talk about the fair together. Industry experts expect the announcement of a cooperation between VW and Ford in the light commercial vehicle sector.
Boris Roessler | picture alliance | Getty Images

Ford and Volkswagen plan to build commercial vans and medium-sized pickup trucks together as early as 2022 as part of a new partnership announced Tuesday.

The partnership is expected to boost annual pre-tax operating results for both companies starting in 2023, the two companies said in announcing the agreement on the second day of the North American International Auto Show in Detroit.

They also signed a "memorandum of understanding" to work together on autonomous vehicle research and will consider new vehicle programs in the future, Ford CEO Jim Hackett said on a conference call Tuesday morning.

It is the first formal agreement in a broad alliance between the American and German automakers. The Ford-Volkswagen partnership will be governed by a joint committee led by Hackett and Volkswagen CEO Herbert Diess.

"I want to emphasize simplicity and speed here," said Hackett on the call. He added the firms have spent a considerable amount of time focusing on how they can collaborate effectively.

However, the two firms will not take ownership stakes in each other, French carmaker Renault did with Japan's Nissan in the late 1990s. While the Renault deal seemed to work seamlessly for years, it appears to be crumbling following the arrest of Nissan's former Chairman Carlos Ghosn, which some industry executives say is politically motivated to wrest control away from Renault.

"Ford and Volkswagen will continue operating as two separate and competitive entities," Hackett said.

Both firms already have commercial vehicle businesses. Ford currently produces the Transit line of commercial vans and the Ranger mid-size pickup, while Volkswagen currently makes the Transporter and Caddy vans and Amarok pickup truck.

Ford is going to make medium-size pickups and commercial vans for the partnership while Volkswagen will develop a city van, Hackett said on the call.

The medium-sized pickup will be made for markets in Africa, South America and Europe only so far.

The news follows Volkswagen's Monday announcement that it will invest $800 million to beginning manufacturing electric vehicle technology in Chattanooga, Tennessee.

"This underlies our strong commitment to the United States," Diess said.

Last week, Ford said it plans to cut thousands of jobs across Europe in an effort to turn around its business in the region, where it has struggled to maintain profitability. 

This is a breaking news story. Please check back for updates.