The point of selling a majority stake in Jag/LR and Volvo is to relieve Ford of distractions and liabilities. This is a great strategy to help correct the problems at the core of Ford.

Think of it like Ford’s relationship with Mazda. When Ford developed the C1 platform, Ford and Mazda shared the costs and risks of the program. Mazda is majority owned, but Mazda could tank and all Ford would loose is its investment there. It wouldn’t bring down Ford.

The goal is to do the same with Jag/LR and Volvo. The spin-off of Volvo would not be the death knell of Ford. In fact, it might be more beneficial than selling off Jag/LR from an investment/risk perspective (not a liability perspective). Think of it like this: Ford is designing their C2 right now. A separate Volvo entity would share those costs with Ford and Mazda (3-way split), so Ford has taken on even less investment with the platform. Then, instead of Ford forking over the money and resources to design the new S40, Volvo will take care of itself and Ford can concentrate its resources on the new Focus.

Whoever bought Volvo probably couldn’t break the Ford-Volvo bond because of how integrated the two groups are now (especially in engineering and manufacturing terms). Volvo is much more dependent upon Ford at this point than Ford on Volvo. But Volvo has the resources and could have the investment to survive on its own two feet separate from Ford’s ups and downs (or Jaguar’s successes and failures).

Anyone who blindly questions the strategy that Ford is taking really doesn’t understand its ultimate goal. Sure, there is something to be said for efficiencies of scale that might have been accomplished by a fully integrated company, but Ford hasn’t see much return from its work of integrating the different groups and so it’s possible that there are just fundamental differences in design and engineering requirements for each brand that cannot be satisfied under one roof (unlike, say, Toyota/Lexus where you can see the corporate DNA in all vehicles and the engineering for the LS460 is just a concentrated version of the engineering for the Camry).

Ultimately, Jag/LR still has access to Ford’s engineering and quality groups. Volvo can still share manufacturing. But Ford doesn’t actually have to worry about updating that many cars in its portfolio in order to prevent cash drains or meltdowns. Each brand can survive or die on its own; share and invest in platforms together or with other companies; and ultimately decide their own direction that best serves their customer base.

I think Mulally gets it, and I think Ford is heading in the right direction with its plans to divest itself of majority stakes and streamline its operations.

I’m a lifelong Ford guy with a wife, father, father-in-law, grandfather, great-grandfather… all either current or retired employees… it’s pretty heart breaking.

now if they just built a full sized sedan that i had the desire to drive in the F/L/M family…