Volkswagen could build some of its vehicles at Ford factories in the USA, Herbert Diess, the German automaker's CEO, has revealed.
One possible outcome could see Volkswagen utilise spare capacity at Ford's North American factories.
In the aftermath of GM's announcement it will shutter up to five factories in the US and Canada, and fire 15 per cent of its white collar workforce, analysts speculated Ford could soon announce even more savage cuts.
Producing Volkswagen Group vehicles would help soften that blow, but could lead to interesting negotiations with the Union Auto Workers union, which is keen to organise Volkswagen's plant in Chattanooga, Tennessee.
Diess said his company is also considering a second factory. The German company told the White House it wants to build more Volkswagen vehicles in the US, as well as starting local production of Audi cars.
President Trump has threatened to impose a 25 per cent tariff on cars imported from Europe. Such a move would likely hurt Audi and Porsche, both Volkswagen Group brands, hardest as they have no local manufacturing capability.
Talks between Ford and Volkswagen kicked off in June, with the initial focus being light commercial vehicles, such as vans and utes, and possibly leading to the Volkswagen Amarok and Ford Ranger sharing one platform. The scope has since broadened, and could include electric cars and autonomous vehicles.
"We are building an alliance with Ford which will strengthen Ford's position in Europe because we will share platforms," Volkswagen's CEO said.
Bill Ford, Ford's chairman, was a little more guarded in his remarks to the media, stating, "We haven’t gotten that granular in our talks yet, but clearly we are talking with them".
Ford said the discussions are progressing “really well”, and “the culture fit is good".