Volkswagen officials expected in Dearborn for Ford talks

Ian Thibodeau
The Detroit News
Ford CEO Jim Hackett, left, meets Volkswagen CEO Herbert Diess at the Detroit auto show in January. Talks on a collaboration between the automakers are expected to continue this week in Dearborn.

Detroit — Volkswagen AG officials are expected to meet their Ford Motor Co. counterparts in Dearborn this week to continue negotiations on a partnership for electric and self-driving vehicles, sources with knowledge of the situation told The Detroit News.

The automakers are continuing to discuss terms of a deal to work together on futuristic ventures after announcing in January they had agreed to terms for a commercial-vehicle partnership outside of the United States.

Ford and VW had been discussing a linked partnership on both electric and autonomous vehicles, but have since separated the electric vehicle discussions from the discussions. The companies have different plans for electric vehicles, according to a CNBC report Wednesday. The automakers had initially discussed a Ford investment in the German automaker's electric vehicle platform; in return, VW would have invested in Ford's autonomous vehicle unit, a source with knowledge of the negotiations told The Detroit News.

VW officials could not be immediately reached for comment on the status of the negotiations Wednesday.

"Our talks with Volkswagen continue," Ford said in a statement. "Discussions have been productive across a number of areas. We’ll share updates as details become more firm."

As the automakers continue to shape terms of a potentially expansive global partnership, Ford's crosstown rival General Motors Co. and LLC are in talks to take minority stakes in the Plymouth-based electric vehicle company Rivian Automotive LLC. Global automakers are turning to partnerships to help fund expensive investments in the electrified and autonomous vehicles they expect to be the future of the industry.

Ford and VW announced in January that the companies had reached an agreement to partner on commercial trucks and vans outside of the U.S. starting in 2022. The automakers said then they would continue to discuss other partnerships.

"You can't do this alone," Ford CEO Jim Hackett said then. "In these changing times must also come the evolution of this ecosystem."

It's unclear now how much VW would invest in Ford's autonomous spinoff, or in Argo AI, the Pittsburgh-based technology company in which Ford owns a majority stake. Negotiations there are ongoing, sources said. Ford and Argo in December had presented terms for VW to invest in Argo as part of the partnership talks, which VW felt was too expensive, another source told The News.

Another sticking point: VW has offered up Audi AG's Autonomous Intelligent Driving unit, called AID, as part of the negotiations, two sources told The News. Audi is a premium brand in the VW Group, and AID is a wholly owned subsidiary of Audi. AID and Audi are targeting a 2021 launch date for self-driving vehicles. So is Ford.

The Detroit News reported in November that Volkswagen and Ford were negotiating a potential $1 billion investment in Argo. Also on the table is an investment in Ford Autonomous Vehicles LLC, which the automaker set up in July to field outside backing. The potential investment from VW could be lower now, a source said. Reuters reported Wednesday Ford is looking for $500 million.

VW is trying to leverage AID as a bargaining tool in the negotiations surrounding an autonomous vehicle partnership, though Ford and Argo are unsure if the 150-employee unit operating about 12 autonomous test vehicles on public roads is worth as much as VW says, according to two sources.

Argo doesn't have a history of absorbing or using the autonomous technology its automotive partners offer. When it partnered with Ford more than two years ago, Argo did not use any of the technology Ford had been developing on autonomous vehicles. It developed its virtual-driver system in-house. Argo did utilize engineers offered by Ford. The companies are negotiating the value of AID, among other things, as the negotiations continue, sources said. 

Meantime, the automakers might not partner on electric vehicles. Jim Farley, Ford president of global markets, said during a taping of the TV show "Autoline Detroit" that the two automakers have different ideas of how the electric vehicle business will operate.

Ford wants to build higher-priced electric vehicles, like the "Mustang-inspired" utility the automaker plans to introduce in 2020. VW is going for lower-post passenger-cars. Farley said that the automakers are on "different timing" when it comes to electric vehicles, according to a report from CNBC.

"Autoline" would not release a transcript of Farley's recorded comments Wednesday. The show was taped Monday and is expected to air Feb.  21. Both automakers have earmarked billions to fund electric vehicles. Ford plans to spend $11 billion by 2022 on electrified vehicles, and VW plans to spend $50 billion on electrified vehicles by 2023.

Twitter: @Ian_Thibodeau