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Ford CEO open to investors in autonomous vehicles but cautious on VW

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Ford CEO open to investors in autonomous vehicles but cautious on VW

Ford CEO open to investors in autonomous vehicles but cautious on VW
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RICK WILKING(Reuters)
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By Joseph White

MIAMI (Reuters) - Ford Motor Co Chief Executive Jim Hackett told Reuters the automaker is open to investment by automakers and others in its autonomous vehicle business, but cautioned that expanding partnerships with German automaker Volkswagen AG <VOWG_p.DE> is a "delicate dance."

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Volkswagen's supervisory board is scheduled to meet on Thursday to review a 10-year strategic plan assembled 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 they are in discussions. Hackett said on Wednesday a previously announced partnership to share development of future light commercial vehicles is “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 has 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 for restructuring 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 includes Ford's 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. Argo Chief Executive Bryan Salesky said 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 will work with Walmart Inc to design automated delivery services.

Signs that the U.S. auto market is heading for a cyclical downturn, coupled with steel cost increases driven by U.S. tariffs, have ratcheted up pressure on all three Detroit automakers.

General Motors Co Chief Executive Mary Barra last month turned up pressure by launching 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 Corp and Honda Motor Co Ltd to develop a robot taxi service.

Hackett acknowledged investor concerns, but said he wants to be sure that Ford has worked out how to redesign its business before cutting anything.

“Hacking off limbs of the organization gets you nowhere,” he said.

(Reporting by Joe White; Editing by Tom Brown)

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