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12/01/2008, 10:09 AM

Ford News

Ford officially considering sale of Volvo

Ford Motor Company, in a bid to raise much-needed cash, announced today that it is exploring options to sell its Swedish subsidiary, Volvo. Ford has owned 100 percent of Volvo, the last foreign brand that composed Ford’s ill-fated Premier Automotive Group, since 1999.

“Given the unprecedented external challenges facing Ford and the entire industry, it is prudent for Ford to evaluate options for Volvo as we implement our ONE Ford plan,” Ford President and CEO Alan Mulally said in a statement released by the automaker.

Ford says that the strategic review of Volvo will take months to complete, but the automaker says it is committed to Volvo for the time being.

The announcement coincides with Ford, General Motors and Chrysler’s meeting with the United States Congress tomorrow to present their proposal for a $25 billion loan.

Suitors for Volvo are unknown at the moment.

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12/01, 10:30 AM

posted by:

beatusmongous

I thought the last time was official. How do you “officially consider?” If you slightly consider, isn’t it still official?

Okay, aside from that, my company is moving, so I won’t be posting much over the next week or two. So while I’m gone, I’m leaving JohnnyCanuck in charge. Mayer, I’d like you to watch for trolls, and LLLL#3, I’d like you to maintain the intelligence standards. Impulsive, keep plugging the purchase of gold. Injunraiv, make sure 1115 doesn’t get out of hand. OldRaven, Inline6, SigmaHyperion, keep the conversations stimulated. NipponRules, please continue fueling the fires. If I didn’t mention you, please don’t feel bad. Just keep doing what you’re doing.

Oh, and CrackerHemi, take a long walk off a short pier.

DISCLAIMER: The previous statement was for comedy purposes only. In no way does the author of that statement claim any authority over anyone else on this site. Also, in no way does the author of the previous statement wish that anyone should take their own life, but merely that they should get wet. No animals were harmed during the writing of this post. Prices may vary. Sold by weight, not by volume. Some settling may have occurred.

12/01, 10:31 AM

posted by:

thertrain

Ford needs to streamline but selling Volvo is not the solution. First, dump the Mercury brand. Then merge Ford US and Europe into one company. Car production coming from Ford Europe and Truck/SuV production coming from the US. Share technology and costs with Volvo and Lincoln but keep the brands completely distinct.

12/01, 10:34 AM

posted by:

MikeFX

How about BMW? They need an outlet for hybrid cars without distilling their performance hertiage. Volvo has always attracted fringe buyers, so an all eco line would serve them well. GM could do the same with Saab.

12/01, 11:02 AM

posted by:

howsmydriving

VW/Audi should buy Volvo. They share the same approach (FWD with small displacement engines), albeit with a different marketing emphasis (safety vs. performance).

12/01, 11:40 AM

posted by:

pavlindrom

I enjoyed the disclaimer, beatusmongus. Very professional.

12/01, 11:53 AM

posted by:

TomF

Talk about burning the furniture. Why sell Volvo and prolong the pointlessness of Mercury? Or for that matter Ford North America?

12/01, 12:23 PM

posted by:

johnnycanuck

Thanks for the endorsement beatus, though it looks like I picked the wrong week to quit amphetamines. Good luck with the move. I’ve learned from past experience that copious amounts of lite beer are mandatory in these situations.

As for Ford and Volvo, how can you continue to call it a Premier Automotive group when there’s only one brand? That’s like having a pimple on your *ss and calling it your posse.

Good point about Mercury, TomF. Better make that two pimples.

12/01, 2:14 PM

posted by:

Lariat Luxury Locomotive Liner No.3

@beatusmongous, I will try to execute your directive as so ordered! Good luck on the company move.
.
I have fond memories of Volvo as my parents had one for years, my friend’s parents have them, and so on. I still like Volvo today, and hope that Volvo makes it through these times as they still offer an automobile of value, and a different choice to the mainstream market.

12/01, 2:16 PM

posted by:

yarddog82abn

I guess the Swiss Gov. will have there way… They did want there own people to take over the company…

12/01, 2:27 PM

posted by:

beemerdude

Ummm…. with nearly every automotive company in the world reporting an “unprecedented” downturn in sales and profits (some at the brink of collapse), will someone please tell me which company would have the money to purchase Volvo from Ford? Or for that matter, Hummer and Saab from GM?

The Chinese?

Tata?

12/01, 2:40 PM

posted by:

F3INT))AP3X

All I know is that this is a bad move for Ford, Mercury is dragging them down way more than Volvo and they would just be stupid to sell them. I mean I would probably never buy one but when I think of how many Volvo’s I see every day, how safe they are, and the fact that everybody and their mother has heard of them probably before they even get a license; just a bad move is all.

12/01, 3:27 PM

posted by:

ryanpstr

Sell Volvo? Wow, that goes to show you that the problem is coming from upper management with bad decisions compounding one after another. It is clear that the streets would rather see and drive a Volvo rather than a Mercury. Everybody and their mother can readily identify what Volvo is known for- Safety, but if you ask the same people what Mercury is known for you’d probably get negative responses. Mercury is a metal used in thermometers you stick up your arse just to get a temperature reading, the problem with Mercury (the brand) is that it’s a useless piece of sheet metal.

12/01, 7:51 PM

posted by:

Architect

You guys are right, it doesn’t make sense from a marketing perspective to keep Mercury and sell Volvo. However, the REASON that they are doing this is to RAISE CASH! They couldn’t do that by selling (or shuttering) Mercury…Volvo is an asset. It’s worth something. This is an indicator of how bad it is that they’d consider offloading this marque. My how far we’ve fallen since the PAG (unfortunately)!

p.s. I always thought PAG was a good strategy, except for the fact that they excluded LIncoln from the group, which prevented them from getting the attention that Cadillac got on the GM side and has reaped from…

12/01, 8:16 PM

posted by:

1c3d0g

Foolish move, Ford. Don’t do it! :evil:

12/01, 10:15 PM

posted by:

global_lightning

Regarding Mercury:
Since there are no longer any independent Mercury dealers, It’s no longer a true marque. It’s just a trim level on some Ford models aimed at affluent females. Shutting down Mercury would save Ford just the cost of some emblem tooling and handful of designer salaries.

Regarding Volvo:
At this point all options are on the table. Since this announcement, the Swedish government has started talking about their own bailout plan. Ford is just looking for the best deal, no matter which government give up the money. The real story is coming tommorrow in Congress

12/01, 11:49 PM

posted by:

sharpie

If the Fiat Group is in good financial shape, they should consider acquiring Volvo to get a spring board back into the U.S. especially for Alfa Romeo. But then, maybe it is not a good time to get back into the U.S. now.

12/02, 12:06 AM

posted by:

jdasch1

Volvo’s a big loser for Ford. Ford needs to concentrate on the Ford brand and get the F***k out of the snobby, pipe smoking , smug car business…like Volvo. This is the last of the Jack Nassar era and good riddins. Mercury won’t make or save them a dime…so its not worth worrying about whether it dies or not…its only a diversion on the real fixes at Ford. The UAW needs to go away or be beheaded…..keep bringing over the vehicles from Europe and Asia to America, and slowly move out of the dark state of Michigan…well maybe run.

12/02, 3:13 AM

posted by:

inline6

Thanks for the shout-out beatus!

Anyone who says Mercury is dragging Ford down has no idea what the hell they’re talking about. Mercury, while not a strong brand in and of itself, provides a little bit of extra sales volume at slightly higher transaction rates than Ford models. While, from a marketing standpoint, there isn’t a logical reason to keep Mercury around, the Mercury brand isn’t hurting Ford any. If anything, it’s giving L-M dealers more volume to sell so they can stay afloat (though we’re down to just two now in the Portland-Vantucky aread). Odds are, Ford is MAKING money off of every Mercury they sell. If anything, Mercury is neither here nor there to Ford’s problems.

Volvo on the other hand has seen sales nosedive. The car that should be its bread-and-butter (S60) is ancient, while the S80 underwhelms and is overpriced, the XC90 has fallen behind in its class (and is also rather old), and the S40 and V50 put together don’t even sell as well as the Saab 9-3 (it doesn’t help that they’re smaller, yet more expensive than the Saab). The C70 and C30 are minor players at best in their leagues, as well. The only vehicle that seems to be going well for Volvo is the new V/XC70. And if they can’t keep the prices down on the new XC60, don’t expect much success, either.

Volvo sales fell hard this year. And while their platforms underpin a few important Ford vehicles, and their technology has helped Ford, too, their lineup of vehicles isn’t new enough, competitive enough, or competitively priced enough.

Volvo needs more investment. The Swedes might do well with them again. Tata might be able to use them to provide some volume to their Jaguar/LR acquisition. But Ford needs to survive. And Volvo still has enough appeal to find a proper suitor. So I agree that Ford would do well to look for a buyer.

 
 
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