Volkswagen may use Ford's US plants to build cars, deepening alliance

Cars seen at the Volkswagen assembly plant in Chattanooga, Tennessee November 4, 2015. — Reuters pic
Cars seen at the Volkswagen assembly plant in Chattanooga, Tennessee November 4, 2015. — Reuters pic

WASHINGTON, Dec 5 — Volkswagen’s chief executive said yesterday after a meeting at the White House that the German automaker was building an alliance with Ford Motor Co and might use the US automaker’s plants to build cars.

VW CEO Herbert Diess said the company was also “considering building a second car plant,” adding, “We are in quite advanced negotiations and dialog with Ford Corporation to really build up a global automotive alliance, which also would strengthen the American automotive industry.”

Ford declined to provide additional details but the automakers have said previously they are talking about potential collaborations.

RBC Capital Markets analyst Joseph Spak said in a research note yesterday that said Diess’ comments raised the chances that VW would use some of Ford’s unused capacity as part of a broader partnership. Spak also said that a European or Asian automaker could seek to acquire some of General Motors Co unused capacity. GM announced last week it plans to idle five North American plants.

“VW may have a little negotiating power as some of the GM facilities could be bought (although this could impact their broader intentions with Ford),” Spak wrote.

VW has an assembly plant in Chattanooga, Tennessee. Of the need for a new plant, Diess said the company is in “quite advanced negotiations in Tennessee but there might be other options as well.”

Diess said VW would not take an equity stake in Ford as part of its alliance. “We are building an alliance with Ford which will strengthen Ford’s position in Europe because we will share platforms,” he said. “We might use Ford capacity here in the US to build cars for us.”

Diess said VW planned to talk more about the Ford alliance in . — Reuters

Source: The Malay Mail Online

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