No formal announcements from either company have been made in this regard yet although if rumors are to be believed, they are most probably going to announce it at CES in January 2016. If this turns out to be true however, it will make perfect sense.
How will it work?
The setup will make use of the advanced autonomous software of Google while using Ford's cars and hardware. This will allow each company to play to its strength. Google's self-driving cars have already covered more than 1.2 million miles and they are covering more than 10,000 miles every week right now. Ford manufactures and sells millions of vehicles every year.
Why does it make sense?
It is only logical that Google would be looking for an established automobile company for a partner since building cars is quite troublesome on its own. There are thousands of parts which need to be put together while meeting strict guidelines with the help of processes, which need huge plants as well as competencies which Google has never required in the past. Ford has been doing it for more than 100 years now. So they will obviously know much more than Google and they do know much more than Google in this capacity.
This marriage only makes sense.
Ford has been discussing its autonomous driving research quite openly this year and has also expressed an interest in finding new partners. They have made it clear that they are willing to work with both startups as well as bigger established companies and that it is a top priority for them right now.
This duo would also make sense since their approach to the idea of autonomous driving seems alarmingly similar. Most other automakers are adopting a gradual approach for introducing self-driving technology. They are adding features one at time. But Google isn't interested in that. They want a car which doesn't have pedals or a steering wheel, a car where humans have nothing to do but sit still and enjoy the ride (or take a nap!). Though Google may be moving a little too quickly but this is still ten years away of becoming reality anyway.
Other automakers such as GM, Tesla, Audi, and Mercedes are currently offering features which allow the car to do some of the driving with humans allowed to take over in case anything goes wrong (which is what happened in iRobot with Will Smith). But Ford has decided to skip this part and with good reason too. One of the biggest challenges faced here is how to transfer control between the car and humans safely, particularly during an emergency at high speeds.
The Future
Just like Google, Ford has also begun fast forwarding full automation and hopes it will be able to provide customers with a fully autonomous self-driving car within 5 years (wow, not 10!).
That being said, it is quite unlikely that Ford is going to be satisfied just providing the wheels, seats, and motor for the car while Google does all of the exciting, valuable work. They obviously don't want to go down the path of irrelevance as far as the build is concerned. Ford doesn't want to be reduced to just a hardware contractor for companies like Google who are doing the innovative work. But who said hardware is not innovative? So perhaps this is not going to be a marriage after all. Well, Google could find other suitors.
Ford has also made it abundantly clear that they aren't interested in using 3rd party software in their cars. They want to develop the technology on their own. The future of autonomous cars looks bright.
