Ford CEO says partnering with VW is a 'delicate dance'
16 November 2018 - Autoblog
Open to AV investment, but 'we compete in a bunch of areas as well'
Ford Chief Executive Jim Hackett told Reuters the company was open to investment by automakers and others in its autonomous vehicle business, but cautioned that expanding partnerships with German automaker Volkswagen AG was a "delicate dance."
Volkswagen's supervisory board is scheduled to meet on Thursday to review a 10-year strategic plan by Chief Executive Herbert Diess that is expected to propose using alliances with rivals to cut development costs for electric and autonomous vehicles and potentially other types of vehicles.
Ford and VW have acknowledged that they are in discussions.
Hackett said on Wednesday a previously announced partnership to share development of future light commercial vehicles was "going better than we thought it would."
"Herbert and I had a great discussion," about the commercial vehicle business, Hackett said.
However, Hackett said expanding collaboration to other areas, such as electric vehicles or consolidation in Latin America, would have to be done carefully, and no broader deal had been agreed.
"We compete in a bunch of areas as well," he said.
Ford's share price has sunk 22 percent this year, reflecting investor frustration with the company's pace of rolling out plans to restructure money-losing operations in Europe, Latin America and China, and a strategy for funding investments in autonomous and electrified vehicles.
Ford earlier this year created a separate unit for its autonomous vehicle operations, which include a majority stake in self-driving car software company Argo AI. Potential investors could put money into either Ford's autonomous vehicle unit, or Argo, Ford executives said.
Ford and Argo are currently testing vehicles in four cities — Miami, Pittsburgh, Detroit and Washington, D.C., said Argo Chief Executive Bryan Salesky. The companies plan to expand the number of test cities in 2019.
Ford has said it expects to launch self-driving vehicles for sale by 2021, when a new vehicle architecture designed specifically for autonomous systems is expected to be ready.
In the meantime, Ford is testing different ways in which self-driving vehicles can be used to carry people and goods. In Miami, for example, the company is collaborating with local businesses to test designs for vehicles that can deliver food, laundry or flowers. On Wednesday, Ford said it would work with Walmart to design automated delivery services.
"We see equal opportunity between moving people and moving goods," said Sherif Marakby, head of Ford's autonomous vehicle unit.
Among the lessons Ford executives have learned from nearly a year of testing in Miami: Customers who live in high-rise apartment buildings are less willing to make a trip to the street to pick up a package stored in a locker built into a vehicle, Marakby said. At the same time, people living in suburban neighborhoods are often interested in getting food or goods delivered from businesses in the city.
Signs that the U.S. auto market is heading for a cyclical downturn, coupled with higher steel and aluminum costs due to U.S. tariffs, have ratcheted up pressure on all three Detroit automakers.
General Motors Chief Executive Mary Barra last month launched a sweeping cost-cutting program, including offering buyouts to 18,000 North American salaried staff, and warning of outright layoffs if not enough employees leave.
Since May, GM and its Cruise self-driving car unit have landed $5 billion in investment commitments from Japan's SoftBank Group and even from Honda in the challenging effort to develop a robot taxi service.
Hackett acknowledged investor concerns, but said he wanted to be sure that Ford had worked out how to redesign its business before cutting anything.
"Hacking off limbs of the organization gets you nowhere," he said.