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Ford and Geely are forming a manufacturing joint venture at Ford's Valencia plant, giving the Chinese automaker a 34% stake and Ford the remaining 66%. The goal is to lift production, cut costs and turn the underused Almussafes factory into a European hub for five models across both brands. Ford gets a lifeline for its struggling European business. Geely gets local production inside the European Union. Everyone gets to call it cooperation instead of survival with better press materials.

Ford and Geely have agreed to create a joint venture around Ford's Valencia plant in Almussafes, Spain. Ford will own 66% of the business, while Geely will hold 34%. Local Spanish reports said Geely will pay about €221 million (about $251 million), valuing the plant at roughly €650 million.

The factory's current workforce will transfer to the new joint venture. Geely said it will rely on local labor rather than bringing workers from China, and future hiring is expected to come from the local workforce.

The two companies plan to produce five vehicles at the plant. Ford will continue making the Kuga, add the latest Bronco family model and develop a new multi-energy crossover. Geely will produce two electric SUVs. One Geely model is expected to start production in 2029, while Ford's new crossover is planned for late 2028.

The partnership aims to bring the plant back toward full use. Almussafes has annual capacity of about 500,000 vehicles but has recently been operating at around 30%, with production far below past peaks.

Ford Europe boss Jim Baumbick said the partnership would allow Ford to compete at a "completely new level of cost" in Europe. Geely executive Victor Young said the Chinese group wants to become a long-term local player, not just export cars from China.

This is what Europe's car industry looks like when everyone finally admits the old model is not working.

Ford's Valencia plant was once a symbol of European manufacturing strength. Production once topped 400,000 vehicles a year. But the factory has lost models, cut shifts and lived with years of uncertainty. By 2025, output had fallen below 100,000 vehicles. Thousands of jobs depended on whether Ford could find new work for a plant too big for its current product lineup.

Geely gives Ford that work.

For Ford, the logic is harsh but clear. Its European business has been losing share and struggling with costs. Its E.U. market share fell to 2.2% in June from 2.9% a year earlier, leaving it behind Chinese players including BYD, Geely and SAIC's MG. Competing with Chinese brands on price, software and electrification is hard enough. Competing while running half-empty factories is worse.

The joint venture helps solve the factory problem. More models mean more volume. More volume means better fixed-cost absorption. Better fixed-cost absorption means Ford has a shot at making European production less painful.

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It also gives Ford access to Geely's speed and EV know-how. Chinese automakers have become extremely good at developing affordable electric and hybrid vehicles quickly. European and US legacy carmakers may not love admitting it, but they increasingly need that capability.

Geely gets something equally valuable: a manufacturing base inside the European Union.

Brussels is pushing Chinese carmakers to localize production, share technology and build more of their European supply chains inside Europe. Tariffs and local content rules make simple exporting from China less attractive. A Spanish factory gives Geely a European foothold, political cover and faster access to customers.

Similar deals are popping up elsewhere. Stellantis has worked with Dongfeng. Nissan is exploring plant-sharing with Chery-linked brands in Sunderland. Legacy automakers have factories, workforces and political relationships. Chinese automakers have lower-cost EV platforms, faster development cycles and export ambition. The deal writes itself.

The awkward part is what it says about the balance of power.

For years, European carmakers worried Chinese brands would flood the market. Now some of them are inviting Chinese brands into their own plants. That is not surrender, but it is recognition that the competition is already here.

For Spain, this is a win. The deal protects a major industrial site, supports thousands of direct and supplier jobs and gives Valencia a role in the next phase of European carmaking.

For workers, the mood is relief with conditions attached. The deal promises continuity, but unions will want guarantees around labor rights, wages and future bargaining. Their message is simple. Batteries and technology can come from elsewhere, but the Valencia workforce wants its existing conditions respected.

But the risks are still real. The plant has to execute multiple model launches across two brands. EV demand in Europe is uneven. Ford still needs to prove its European product strategy can work. Geely must show it can localize without losing the cost advantages that made it attractive in the first place.

The joint venture is expected to launch formally in 2027, with new model production ramping from 2028. Investors and workers will watch for investment details, public support, labor agreements and firm production timelines.

Ford wants a European revival. Geely wants a European home. Valencia now has to prove it can build both.