The Financial times: Volvo is for sale.....

[jon_the_limey]

Yes Ford is working on new Diesel tech. But they are working on building what BMW already has.

BMW's 3.0L Diesel is making 290 Hp with 425 Ft lbs of torque and getting 40+MPG combined in the 5 Series. Ford can not even get these kind of HP Figures out it's gasoline engines.

Ford and Citroen are working to match figures like this. Do not think that BMW's diesel program has nothing to offer.

 

Ermm.......

 

Do you seriously believe that BMW is that far ahead. You're making the same mistake every other armchair automotive expert makes, i.e. look at the headline grabbing power & torque figures, equate that with "technical superiority", and completely ignore the cost/volume/complexity/implementation and other factors. BMW powertrain strategy means they just have to develop ONE engine package and it will slot in nearly all of their cavernous RWD & MacPherson Strut engine bays, compare this to Ford/Jag/LR! Also they don't have to develop engines for medium-duty commercial vehicles, which requires a different mindset.

 

BMW can afford to offer engines like this before everyone else because they have the market and therefore opportunity to sell them at an inflated price at bugger all volume. How many of these all-singing and dancing "serial-sequential twin-turbo diesels" do they sell compared to just their bog-standard versions of the 3.0 litre 6-cyl and especially their 2.0l 4-cyls?

 

Ford knows how to make an engine as powerful as any BMW diesel. Ford have the technology & expertise and the 2.7 V6 diesel and 3.6 V8 have plenty of potential. I personally know that the extremely clean design of the combustion chamber and fundamentally sound engine architecture of these two engines certainly gave the germans a bit of a shock!

 

Anyway going back on topic, Ford couldn't sell Volvo without ripping the guts out of FoE and vice-versa. C1 and especially EUCD platforms would have been far harder to justify for development without Volvo's extra volume and engineering partnership. If I understood correctly Volvo was resposible for implementing CAN (or similar) electricals in C1, making it far easier to assemble compared to C170 and reduced cycle time significantly. EUCD plarform is largely responsible for FoE's improvement in profitability and has given them another step improvement in image (If you think Ford has a bad name in the US, it has been a lot worse here). S-Max has been a big hit and (anecdotically at least) has managed to get a few people to trade in their BMW's and Audi's for one. EUCD is also helping take LR to the next stage with Freelander/LR2. If Volvo goes then they might aswell chuck in FoE with it and license the Ford name!

[J-150]

2) It is unlikely that BMW wants to spend what Ford would ask for Volvo.

 

 

after BMW screwed Ford in the Land Rover deal, I'm sure Ford would be asking for more money from them than from anyone else.

[Edstock]

Why would BMW want a transverse engine/Haldex type AWD company? Not for anything with the BMW roundel on the hood — remember the reaction of the Jag faithful to the X-type?

 

And if they want to expand the MINI range, there's cheaper ways to do it, like building in Poland, Czechoslovakia or Slovenia, than buying factories in socialist wonderland.

[Extreme4x4]

Many analysts want Ford to follow GM's route, and sell everything. As was shown in the Jaguar "rumors," earlier this year................. all it takes is one small rumor from anywhere............... and the media will run with it. Again, this is wishful thinking based on what analysts want Ford to do.

 

Do not believe anything you read, until you hear it from Ford.

[focus05]

So, lots of little things being missed here, and an understanding of the business landscape and Ford's near-term needs is crucial to passing sound judgement.

 

First, did Ford put Volvo cars up for sale? Probably not. My guess is that BMW came over and inquired about it. Ford is struggling. They need cash. Maybe we can get a sale.

 

From Ford's perspective, you have to look at two things: 1) how much would we get from Volvo and then 2) how much would it cost to keep Volvo a competitive company in light its aging line and falling sales?

 

How much would they get? Probably not the $6.5b they paid, but I bet they'd get around $4b. Not a bad chunk of change, and they wouldn't have to worry about Volvo's upkeep any more. Most importantly, it would take probably 5-7 years to completely extricate all Volvo components meaning no product plans would change through probably 2010-2011. That means Ford would have the same line-up despite selling Volvo. What they would loose is access to future developments, but if Mulally's goal is reached, Ford will be profitable and able to develop new products much faster at that point and necessarily need Volvo to carry some of that weight while also not having to create Volvo models from each platform.

 

That cash infusion would be HUGE. Do not underestimate it.

 

What are the pros of dumping Volvo? Less to worry about. Ford can focus on their bread and butter product lines (Ford, Jag, LR - with Lincoln-Mercury in the states).

 

What will happen, though, if Volvo's engineering team disappeared? First, Ford would NOT have to stop using Volvo standards and features in their cars. FoMoCo owns that IP. Just because BMW buys Volvo does not mean they take everything from Ford. Doesn't work like that. Would it impact future Ford developments (assuming existing development finishes off on the C2/EUCD2 etc)?

 

Let's start with the C1/C2. The C1 probably would not have been developed without Volvo, but it is now, and we know the C2 is coming stateside. Well, that means the C2 will have A LOT more volume even if you dump Volvo. So, when C3 debuts in 2016 or so, the total volume on the platform will be more than made up by Ford's product portfolio separate from Volvo. So, no worries there. What about engines for C1/C2? Some are Ford-Peugeot some are Ford some are Ford-Volvo. Although I would not rule out future tech sharing as part of the deal with a BMW-like buyer, I would say that even if everything were cut off, Ford would do just fine.

 

EUCD. Same situation as the C1/C2. Ford has gotten a lot from Volvo. It will take them a long time to pull apart all the dev teams, but ultimately, Ford could do it without a lot going missing.

 

Why not sell Jag/LR? Why sell them? LR is profitable as best we can tell. I have to admit that with the XKR and the new XF coming, I am extraordinarily excited about Jaguar's future. No, I would say keep LR/Jag.

 

What does the sale of Volvo open up? The possibility of Rover reborn - possibly sold as Mercury in America. Will that necessarily happen. Depends on costs, ultimately.

 

I guess my whole point here is that Ford needs money more than anything. Volvo, while it has been very helpful to Ford, is just another product line to maintain. The sale of Volvo would not impact near term development. Things would continue as we are expecting them to except that Ford has more money in its back pocket and will be better able to pay down debts, withstand market pressures and develop new products. Nothing in Ford is as critical, not even Mazda at this point as harsh as that sounds, as having cash in the bank and driving out new products worldwide.

 

That said, Mulally and team are not stupid. They're not going to sell just to sell. The price has to be right, and the price is probably pretty high considering how much would have to be pulled apart and given up by Ford. But, just like when you do some job interviews just to see what you're worth in the real world, it's often good to look around.

 

Do I think Ford should sell Volvo? Well... that's my personal opinion and ultimately has no bearing on what it looks like from a business perspective.

[kpc655]

This is a completely logical move. Ford cant support so many different brands, it makes sense to sell/shutter some..particularly when its located so far away from headquarters. If something happens it'll probably be structured similar to the AM deal due to the high level of component sharing. i.e. ford continues to supply the new owners (as it does with AM and engines from Koln).

 

Next up...hopefully Land Rover and Jaguar (outside the US). and hopefully they'll shutter mercury. Maybe then they can come up with a few really good cars/trucks rather than a whole bunch of mediocre ones.

[TStag]

after BMW screwed Ford in the Land Rover deal, I'm sure Ford would be asking for more money from them than from anyone else.

 

How did BMW screw Ford on Land Rover? It's not like Ford have pumped money into Land Rover and got no return. Name one unprofitable Land Rover. Even the Defender makes money! Land Rover is now allegedly more profitable than Volvo. In other words it's the most profitable money making division of Ford in Europe! The above statement makes no sense at all. The simple fact is that Ford should ditch their rubbish American divions. Volvo, Land Rover, Mazda and Ford Europe are suceeding despite Ford of North America's incompetance. Why are you kicking a sucessfull Ford division?

[RichardJensen]

Why did Ford borrow money instead of selling assets (GM sold assets instead of borrowing money):

 

Two reasons...

 

1) Ford is rather more tightly connected to its salable assets than GM (Ford owns all of Volvo, LR, Jag, Ford credit is almost purely an automotive lending and leasing company, vs. GM's 20% stakes in Isuzu, Subaru, Suzuki, and the more diversified GMAC unit).

 

2) Ford's strategy is to borrow money against NA assets to solve NA problems. There is no point in selling off Volvo to fix NA. Not if you can borrow the money. As Mulally said when halting the Jaguar sale, "We can only sell this company once."

 

Also, do not be quick to assert that Volvo's lineup is aging. It will be by and large refreshed by the close of this year. Also, do not be quick to assert that Ford will be able to continue to benefit from Volvo standards after selling Volvo. Recall that Ford is using Volvo's operations to spearhead its diesel hybrid programs and Ford has not relocated Volvo's crash test labs, instead investing heavily in the Swedish faciliities.

 

One of the stamps of Mulally's tenure has been a 'return' to sound business practices (I swear it seems some sound business practices were never in place at Ford), and one of the foremost 'sound business practices' is that you do NOT sell a business unit that is both 1) profitable and 2) tightly integrated with your other business units. There is no reason for it. If you are losing money in another unit, you fix that unit, you don't sell off a solidly performing asset to patch up the holes in another asset.

Edited May 26, 2007 by RichardJensen

[MKII]

Volvo's sales have been slipping worldwide even with some new and fantastic product Sales are still slipping.

 

Volvo Car Corporation (VCC) sales April, 2007

Total figures per region, Year to Date for car models.

World sales YTD 2007 155,118 // 2006 143,171 + 8.3%

 

Volvo Europe sales YTD are up 12%. USA is one of the only markets in the minus

 

Total world

155,118

143,171

+ 8.3

 

Europe*

93,915

83,784

+ 12.1

 

USA

35,009

38,078

- 8.1

 

Sweden

18,782

18,495

+1.6

 

UK

11,718

11,511

+1.8

 

Germany

11,280

10,978

+2.8

 

Netherlands

8,299

7,007

+ 18.4

 

Italy

7,845

6,179

+ 27

 

Belgium

6,213

4,933

+ 25.9

 

Spain

6,333

5,674

+ 11.6

 

France

4,872

3,406

+ 43

 

Russia

4,675

2,022

+ 131.2

 

 

To access the link you will need to register

source https://www.media.volvocars.com/global/enha...x?mediaid=11465

[macattak1]

"Volvo is much stronger in Sweden where it is estimated that one in every five cars sold is a Volvo."

 

Due to LOYALTY and the fact it was their own car at one time. Even owned by a foreigner, they are still loyal to the brand. Unlike certain people in north america.

 

Nice! The US is only loyal to the idea that we are too successful and have to hold up everyone else and feel bad about our success.

 

Peace and Blessings

[LSFan00]

US sales being down slightly for Volvo also correspond with incentives/marketing here, along with being last to get the new stuff, if at all often. Every business on the planet is for sale. Ford will still own Volvo in 5-10 years though, I would guess, unless the mothership has to sell it off during a bankruptcy.

[TStag]

Still think the FT and Autocar made the story up?

 

http://uk.reuters.com/article/businessNews...836370120070528

 

STOCKHOLM (Reuters) - Loss-making Ford Motor Co. (F.N: Quote, Profile, Research is planning to sell Swedish car maker Volvo (VOLVb.ST: Quote, Profile, Research and German carmaker BMW (BMWG.DE: Quote, Profile, Research could be a possible buyer, a Swedish newspaper said on Monday.

 

The Goteborgs Posten daily reported on its website that a source within Ford said BMW has been studying a possible purchase of Volvo.

 

The Financial Times also reported last Friday BMW was in informal talks to buy Volvo.

 

"We cannot comment on speculation, this is a question for our owner," said a spokeswoman for Volvo cars.

 

Ford bought Volvo in 1999 and it is now part of the U.S. company's Premier Automotive Group, including Jaguar and Land Rover.

 

Ford does not disclose results for its individual brands, but taken together its luxury line-up lost $327 million in 2006.

 

Merrill Lynch has said Ford could raise over $9 billion by selling the remaining luxury car brands.

 

Volvo Cars Chief Executive Fredrik Arp told Reuters in March that Ford was committed to keeping the Swedish car maker.

[TStag]

...is this the end of PAG or the precursor to Ford letting Land Rover off it's leash to go after Volvo? Let's face it Land Rover makes almost half as many cars on sales of SUV's alone and about as much profit as Volvo. Logically an expanded Land Rover could take on Volvo and outperform them. I'm rapily coming to the conclusion that Volvo will be sold and Land Rover expanded to bridge the gap.

[TomServo92]

Still think the FT and Autocar made the story up?

 

http://uk.reuters.com/article/businessNews...836370120070528

 

STOCKHOLM (Reuters) - Loss-making Ford Motor Co. (F.N: Quote, Profile, Research is planning to sell Swedish car maker Volvo (VOLVb.ST: Quote, Profile, Research and German carmaker BMW (BMWG.DE: Quote, Profile, Research could be a possible buyer, a Swedish newspaper said on Monday.

 

The Goteborgs Posten daily reported on its website that a source within Ford said BMW has been studying a possible purchase of Volvo.

 

The Financial Times also reported last Friday BMW was in informal talks to buy Volvo.

 

"We cannot comment on speculation, this is a question for our owner," said a spokeswoman for Volvo cars.

 

Ford bought Volvo in 1999 and it is now part of the U.S. company's Premier Automotive Group, including Jaguar and Land Rover.

 

Ford does not disclose results for its individual brands, but taken together its luxury line-up lost $327 million in 2006.

 

Merrill Lynch has said Ford could raise over $9 billion by selling the remaining luxury car brands.

 

Volvo Cars Chief Executive Fredrik Arp told Reuters in March that Ford was committed to keeping the Swedish car maker.

 

Notice how they referenced the Financial Times article. It makes me wonder how much original research they did on this article. I still have doubts at this time.

Edited May 28, 2007 by TomServo92

[TStag]

I agree but there's an awfull lot floating about on the web now on this. It 'smells' like it may be true and if BMW people are being quoted and venture capital firms named then you have to wonder. At first I couldn't see any logic to selling Volvo, but if it raised $9 billion then Ford could pay off some debt and expand Land Rover to cover Volvo's lost sales. I suppose you could argue that Land Rover is significantly under valued at present because of Jaguar losses and the fact they operate as one group. Selling Land Rover to get rid of Jaguar would be costly and would probably be one of those things to come back and bite Ford on the arse. Remember Land Rover i rumoured to make as much as Volvo on half as much sales. I get the impression that Ford would sell either Land Rover or Volvo but not both. Given that Volvo can raise some cash now and Land Rover could simply start making cars to rival Volvo then it makes sense.

 

I still have my reservations about all this but I can see some sort of logic emerging.

[TStag]

Btw I read an article recently in which Gerry Mcgovern (head of Land Rover) said he had been told by Ford bosses to start thinking beyond SUV's. I thought at the time Land Rover would just end up competing with Volvo. Maybe that's Ford's big plan.

[LincolnFan]

Ford getting serious about Lincoln?

[bolita]

Btw I read an article recently in which Gerry Mcgovern (head of Land Rover) said he had been told by Ford bosses to start thinking beyond SUV's. I thought at the time Land Rover would just end up competing with Volvo. Maybe that's Ford's big plan.

Ford does own the Rover brand..right? If Ford does take this route, we will be talking about pumping billions into a tarnished brand...

[RichardJensen]

1) Reuters is a TERRIBLE news agency.

 

2) This isn't even THEIR story.

 

3) Ford NEVER telegraphed the sale of AM. They simply announced that it was for sale. Previously, rumors around Jaguar were thick and heavy, and then all of a sudden they disappeared.

 

One thing that can be said quite clearly about Ford is that they do not tend to leak big announcements. Mulally's appointment caught everyone by surprise. The AM sale was less surprising, but was still not preceded by rumors. Ford's $23B loan & credit deal was similarly 'dumped' on the market (there were only the vaguest of rumors predating it, and those rumors centered on Robert Rubin's resignation from the Ford board due to conflicts of interest). Contrast that with the rumors of an imminent sale of AM to LVMH, the rumors that Ford was going to sell a majority stake in Ford credit, that Ford was going to just sell Jaguar, that Ford was going to sell Jaguar and Land Rover to JCB, Jaguar to Renault, Ford was going to partner with Renault. Feel free to stop me when you get tired of instances where rumors surrounding Ford have proven to be not only false but far, far, far from the final outcome of things.

 

It can generally be said that the rumors that swirl around Ford are more often false than true. Until I see a press release from Ford announcing that Volvo is FOR SALE, not that it is being sold to BMW.....

 

I refuse to believe the busywork reporting of a Reuters hack during a long U.S. holiday weekend.

 

In the past, Ford has NOT negotiated asset sales without soliciting offers through public channels. Look at the whole Visteon/ACH thing. All of that has been done with a flurry of press releases and a lot of noise. Also, Ford could've easily offloaded AM without any public fanfare, but instead sought offers and proceeded deliberately and in plain view.

 

It would be entirely unlike the discipline of Alan Mulally, Bill Ford, and Don LeClair, for Ford to quietly negotiate a deal with BMW for Volvo over a few short months.

 

If Ford decides to sell Volvo, they will announce it publicly, and they will take their time reviewing offers

Edited May 28, 2007 by RichardJensen

[jpd80]

Could this article meerly be BMW doing "due dilligence", assessing Volvo's financial situation/actual worth to them?

There's no saying they have to buy the whole company, maybe partnership/technology sharing is in the wind?

They are also rumored to be looking at Alpha Romero too. Could be window shopping.

Edited May 28, 2007 by jpd80

[RichardJensen]

I agree but there's an awfull lot floating about on the web now on this.

 

Yeah, an awful lot of reporting that isn't fit to be used to housebreak a Newfoundland with diarrhea.

 

Autocar reports that, back in January, BMW approached Ford about Volvo. Autocar also reports that BMW pretty much tabled the idea, which is why they can report it.

 

Some auto blog repeats the gist of the Autocar story, only changes it all to present tense in order to make it sound like a deal is imminent.

 

Some yutz reporter reads the Autocar article (or the blog gist) and decides that using someone else's story is wayyyy easier than writing his own.

 

Meanwhile Volvo Truck reads all this, says, "What the ????" and tells some other dumb reporter that they would rather buy back Volvo car than see them sold to BMW.

 

Thus rumor two starts, "Volvo Truck to buy back Volvo Car".

 

Then you get this FT report which basically repeats the Autocar story, but makes it sound like the reporter did his own work instead of cribbing the Autocar report (go back and read both articles, the only thing that's different between the two is that the FT article contains way more denials from both Ford and BMW--the substance of the 'news' is exactly the same.)

 

Cue Swedish newspaper article that quotes a Ford executive as saying that BMW approached Ford about buying Volvo. Now tell me, is this anything that we didn't know weeks ago? That BMW approached Ford about Volvo? REALLY? Has ANY NEW INFORMATION COME TO LIGHT? No. We just now have confirmation on the Ford side (of a sort).

 

Now, enter from stage left, the Reuters reporter with a deadline to meet and only enough mental capacity to read the English translation of a Swedish news site.

 

Okay, so we've got Ford confirmation from a Swedish newspaper saying that the Autocar story that BMW was interested in Volvo is substantially true, so what does Reuters do? They slap a "Volvo for sale" sentence into an article that contains nary a shred of evidence that Ford actually is looking to sell Volvo.

 

And that constitutes "EVIDENCE" in this internet age?

 

Are we all so destitute of critical thinking skills, are we so bankrupt of analytical ability, are we, in short, so gullible, stupid, credulous and lazy so as to take the multiple vomitings of the same piece of stale information as something fresh and palatable every time it is set before us?

Edited May 28, 2007 by RichardJensen

[silvrsvt]

On the front page of Yahoo now

 

http://news.yahoo.com/s/nm/20070528/bs_nm/ford_volvo_dc

[TStag]

I accept that this may be speculation, but I've noticed how rumours like this often become fact. Typical examples were BMW about to pull out of Rover...and they did or Daimler contemplates Chrysler sale and they then allowed people to bid. Just because we may not like the story we shouldn't rule it out.....

[RichardJensen]

I've noticed how rumours like this often become fact.

Cite specific instances regarding FORD MOTOR COMPANY, please.

 

References to past instances with DCX, BMW, etc., are simply NOT RELEVANT.

[RichardJensen]

I want you to find even a VERB or an ADJECTIVE, let alone anything longer than that in that article that supports this sentence:

Loss-making Ford Motor Co. (NYSE:F - news) is planning to sell Swedish car maker Volvo (VOLVb.ST) and German carmaker BMW (BMWG.DE) could be a possible buyer, a Swedish newspaper said on Monday.

And when you can't, then don't wonder why I consider Rooters to be one of the worst, if not THE worst wire service out there.

Edited May 28, 2007 by RichardJensen