Nothing for U.S. in Ford, VW partnership — yet

DETROIT — A new partnership with Volkswagen Group could help Ford Motor Co. right its struggling European business, but the implications in the U.S. aren't yet clear, and some analysts expressed concern that Ford is giving VW more than it's getting in return.

The tie-up was part of a flurry of news to kick off a busy 2019 in which Ford expects to boost margins on the strength of redesigned crossovers and the new Ranger pickup as its global restructuring takes root. The automaker also introduced new products expected to rake in profits and projected that its global earnings would increase this year after a softer 2018.

The partnership with VW, with whom Ford has been talking for the better part of a year, involves jointly developing commercial vans and a midsize pickup for overseas markets. But if Ford hoped the deal would finally provide a spark to its stock, investors had other ideas. Analysts shrugged off the alliance for either not going far enough or sharing one of its biggest strengths — pickups — with a competitor. Morgan Stanley analyst Adam Jonas wrote in a note that he "wouldn't get too excited," while John Murphy of Bank of America Merrill Lynch said the deal posed risks akin to Ford's mortgaging of the Blue Oval logo to stay afloat heading into the Great Recession.

And the day after the arrangement was announced, Ford shares plunged the most in a year, in response to yet another round of vague financial guidance from executives.

"I think a transition story is hard to tell and hard to understand," Executive Chairman Bill Ford said. "As we get through 2019, we'll get much greater clarity and people will say 'OK, now we get it.' "

Ford said the company likely would have to live with Wall Street being uncertain about its plans for a while longer.

"We can't really tip our hand beforehand on a lot of the things we're doing," he said. "We have to sort of say to people 'Take our word for it,' but analysts have models they have to create. Taking our word for it doesn't fill out a model."

Jim Farley, Ford's president of global markets, hinted that the companies could expand their alliance to include vehicle programs stateside.

"We're still talking," Farley said at the Automotive News World Congress here. He declined to elaborate on any time frame for a potential U.S. deal, emphatically telling reporters that he had "no new news" to share.

The two sides also signed a memorandum of understanding "to investigate collaboration on autonomous vehicles, mobility services and electric vehicles." VW CEO Herbert Diess said the automakers are looking at combining their autonomous vehicle development, including Ford-owned Argo AI, as well as VW research groups in Wolfsburg and Munich. On the EV side, Ford is looking to use VW's new modular platform.

"It's an attractive area," said Ford CEO Jim Hackett. "Both the EV and AV are big costs for investment. Both are really important to both companies' future. That is part of the incentive to find ways to cooperate."

Diess said he was open in principle to sharing his modular electric architecture with Ford.

"It probably wouldn't be worldwide, because the platform is especially viable for Europe and maybe for China," he told analysts.

Ford's decision to provide only directional financial projections for 2019, rather than specific figures, didn't sit well with analysts who have been critical of the level of detail provided during Hackett's 20-month tenure.

"Ford has basically once again said 'your guess' to the financial community with respect to specific financial guidance," Chris McNally, an analyst at Evercore ISI, wrote to clients.

Ford is scheduled to formally report its fourth-quarter and full-year earnings on Wednesday, Jan. 23. It provided some preliminary figures last week, estimating full-year adjusted earnings at $7 billion before interest and taxes, which is at the bottom of the $1.30-to-$1.50 per share range it previously forecast. That's $2.6 billion less than in 2017, largely because of declines in China and Europe, Ford said.

But revenue rose 2 percent to $160.3 billion, and its North American profit margin rose to 7.9 percent, from 6.8 percent in 2017, as a result of improved pricing and strong demand for utility vehicles and pickups.

Over the next 24 months, Ford intends to update 75 percent of its lineup, including adding seven new utilities including the redesigned Explorer, which it unveiled at the Detroit auto show. There will still be room for performance vehicles, such as the Mustang Shelby GT500, also revealed at the show, that will likely cost north of $60,000.

Meanwhile, it's working to address weak spots outside the U.S., particularly in Europe.

The partnership with VW won't mean further cutbacks at Ford's European operations, which were already reeling in the wake of an announced restructuring.

Instead it was Diess who conceded that VW's plant in Hanover, Germany, where the VW Amarok pickup and Transporter van are built, would be affected. Although VW's light commercial vehicles business enjoyed one of its strongest years ever, with unit sales stable at half a million in 2018, Diess blasted it as lacking scale.

Christiaan Hetzner contributed to this report.