Ford Motor Co.'s Swedish subsidiary Volvo Car is forming a new joint venture to develop and make all-wheel-drive systems with two suppliers in Sweden.

Volvo will own 40% of the operation, while Getrag Dana Holding, a JV between Dana Corp. and Getrag GmbH, will own 60%. The companies will invest SK1.5 billion ($177 million) in the JV in Koping, Sweden, between 2004-2006.

Curt Germundsson, Volvo's production manager at the Koping manual transmission plant, says the facility will become Ford's AWD systems center. It also will sell AWD systems to non-Ford companies. “It will be a freestanding supplier for the car industry,” he says.

The plant will produce about 1 million AWD systems annually. During the period that Koping transitions from making transmissions to AWD systems, there will be a surplus of employees, Germundsson says.

Production of manual transmissions will shift from Koping to Getrag Ford Transmission in Cologne, Germany, a joint venture between Ford and Getrag.

The Cologne facility is one of three plants making transmissions for Ford. The three plants have adequate capacity to absorb the volume previously turned out by Koping.