suv_guy_19 Posted March 4, 2008 Share Posted March 4, 2008 (edited) DETROIT -(Dow Jones)- Ford Motor Co. (F) is developing a new plan for its Volvo unit while also taking steps to operate it on a more "standalone basis." The "top priority is to return Volvo to sustainable profitability," Ford Executive Vice President Lewis Booth said during an analyst conference call in Geneva today. Ford decided in November to keep Volvo and work to improve both its balance sheet and brand image. Ford is in the process of selling its Jaguar and Land Rover operations to India's Tata Motors Ltd. (TTM). CNN Edited March 4, 2008 by suv_guy_19 Quote Link to comment Share on other sites More sharing options...
NickF1011 Posted March 4, 2008 Share Posted March 4, 2008 Wouldn't getting Volvo to operate on a more "standalone basis" go against the mantra of One Ford and against the idea that they will, in fact, KEEP Volvo? You would think they'd want to involve them in the corporate structure far MORE if they are wanting to reduce their costs and get them to be more profitable. :shrug: But what do I know....I don't have an MBA..... Quote Link to comment Share on other sites More sharing options...
igor Posted March 4, 2008 Share Posted March 4, 2008 Wouldn't getting Volvo to operate on a more "standalone basis" go against the mantra of One Ford and against the idea that they will, in fact, KEEP Volvo? You would think they'd want to involve them in the corporate structure far MORE if they are wanting to reduce their costs and get them to be more profitable. :shrug: But what do I know....I don't have an MBA..... One Ford is about the FORD BRAND - not the other brands. Igor Quote Link to comment Share on other sites More sharing options...
NickF1011 Posted March 4, 2008 Share Posted March 4, 2008 One Ford is about the FORD BRAND - not the other brands. Igor It doesn't include the other brands? Why the hell not? Sounds like another recipe for disaster if the heads of the other divisions are still going to be making this demand and that. Quote Link to comment Share on other sites More sharing options...
suv_guy_19 Posted March 4, 2008 Author Share Posted March 4, 2008 It doesn't include the other brands? Why the hell not? Sounds like another recipe for disaster if the heads of the other divisions are still going to be making this demand and that. Well, not really. There will be one Ford, one Volvo, and one Mazda. Quote Link to comment Share on other sites More sharing options...
igor Posted March 4, 2008 Share Posted March 4, 2008 (edited) It doesn't include the other brands? Why the hell not? Sounds like another recipe for disaster if the heads of the other divisions are still going to be making this demand and that. Volvo and Mazda are perfectly on board with what Mulally wants - it is Ford that needs help. Volvo and Mazda function well on their own as a global brand. They also function well in sharing technology with Ford and each other. Really = think of Volvo's new model as Mazda's current model. Much more independence - independent PD, etc Mazda and Volvo know that they need to use Ford parts to break even - but at times they see the benefit of going it alone for a second (see Mazda5, CX-9, cx-7, etc) - so they will. The division that needs the most help is Ford - the Ford brand - it needs help to become one global brand Igor Edited March 4, 2008 by igor Quote Link to comment Share on other sites More sharing options...
papilgee4evaeva Posted March 4, 2008 Share Posted March 4, 2008 Well, not really. There will be one Ford, one Volvo, and one Mazda. I like it. Quote Link to comment Share on other sites More sharing options...
NickF1011 Posted March 4, 2008 Share Posted March 4, 2008 Volvo and Mazda are perfectly on board with what Mulally wants - it is Ford that needs help. Volvo and Mazda function well on their own as a global brand. They also function well in sharing technology with Ford and each other. Really = think of Volvo's new model as Mazda's current model. Much more independence - independent PD, etc Mazda and Volvo know that they need to use Ford parts to break even - but at times they see the benefit of going it alone for a second (see Mazda5, CX-9, cx-7, etc) - so they will. The division that needs the most help is Ford - the Ford brand - it needs help to become one global brand Igor Makes more sense when I hear it that way. Quote Link to comment Share on other sites More sharing options...
timmm55 Posted March 4, 2008 Share Posted March 4, 2008 It doesn't include the other brands? Why the hell not? Sounds like another recipe for disaster if the heads of the other divisions are still going to be making this demand and that. Maybe, maybe not. Volvo and Mazda can share platforms but should still maintain their strong identities. ONE FORD is one Ford throughout the world ideally/eventually. Quote Link to comment Share on other sites More sharing options...
mlhm5 Posted March 4, 2008 Share Posted March 4, 2008 CNN London Business says Ford's new business plan is to sell Volvo. Quote Link to comment Share on other sites More sharing options...
NickF1011 Posted March 4, 2008 Share Posted March 4, 2008 London Business says Ford's new business plan is to sell Volvo. Which Ford has repeatedly denied. Quote Link to comment Share on other sites More sharing options...
wescoent Posted March 4, 2008 Share Posted March 4, 2008 London Business says Ford's new business plan is to sell Volvo. British financial media outlets don't know their asses from a hole in the ground. Quote Link to comment Share on other sites More sharing options...
AlRozzi Posted March 4, 2008 Share Posted March 4, 2008 Wouldn't getting Volvo to operate on a more "standalone basis" go against the mantra of One Ford and against the idea that they will, in fact, KEEP Volvo? You would think they'd want to involve them in the corporate structure far MORE if they are wanting to reduce their costs and get them to be more profitable. :shrug: But what do I know....I don't have an MBA..... Well Nick, I do have an MBA and it isn't perfectly clear to me either. This may be viewed one way as preping for an eventual sale. However, given some of the statements we've been hearing, I'll assume we can take it from the point of view that this means Volvo will stay. Therefore, by forcing Volvo to stand on its own, it's kind of like telling your child he must pay his own way in life. Volvo cannot consolidate losses in Ford's income statement and it will produce clarity in financial reporting. The theory would be that Volvo might work harder to remain as efficient as possible. An example may be that if Swedish auto workers want too much pay, the heavy expense would show in Volvo's numbers and an arguement could be made for producing at least some models in lower cost regions. The same could apply to investment in platforms and components as well. But mostly it will give investors a clearer and more accurate financial picture of Ford's corporate divisions. And that is the best I can come up with at the moment - for what it's worth? Quote Link to comment Share on other sites More sharing options...
7Mary3 Posted March 4, 2008 Share Posted March 4, 2008 Writing is on the wall. I think they will eventually sell it. Quote Link to comment Share on other sites More sharing options...
TomServo92 Posted March 4, 2008 Share Posted March 4, 2008 (edited) It sounds to me they're going to treat Volvo like Mazda: limited indepedence. EDIT: Posted this before I read Igor's similar comments. Edited March 4, 2008 by TomServo92 Quote Link to comment Share on other sites More sharing options...
mlhm5 Posted March 4, 2008 Share Posted March 4, 2008 (edited) Which Ford has repeatedly denied. The reason Ford will sell Volvo is that it is worth more to someone else than it is to Ford. Ford has been tinkering with the Volvo strategy for more than a year and Volvo is still unprofitable. If Ford kept Volvo and invested say $500 million - $1 billion to return it to profitability and was successful within 3 years and made $200 million profit before taxes growing at 10% a year, a sale this summer for $6 billion would be 30 years of income and no investment would be necessary. I don't think the returns are there for a new Ford invewtment in restructuring and rebuilding Volvo. That should have been done when they bought Volvo almost 10 years ago. Now Volvo has a different reputation than it did when Ford bought it and it will take big $$ to change that opinion. Nope, a smart company would sell it. Edited March 4, 2008 by mlhm5 Quote Link to comment Share on other sites More sharing options...
suv_guy_19 Posted March 4, 2008 Author Share Posted March 4, 2008 The reason Ford will sell Volvo is that it is worth more to someone else than it is to Ford. Ford has been tinkering with the Volvo strategy for more than a year and Volvo is still unprofitable. If Ford kept Volvo and invested say $500 million - $1 billion to return it to profitability and was successful within 3 years and made $200 million profit before taxes growing at 10% a year, a sale this summer for $6 billion would be 30 years of income and no investment would be necessary. I don't think the returns are there for a new Ford invewtment in restructuring and rebuilding Volvo. That should have been done when they bought Volvo almost 10 years ago. Now Volvo has a different reputation than it did when Ford bought it and it will take big $$ to change that opinion. Nope, it will be sold. Except for last year Volvo has been profitable. Quote Link to comment Share on other sites More sharing options...
igor Posted March 4, 2008 Share Posted March 4, 2008 As was said before - if someone offers Ford a right price for Volvo, they will consider it - but unlike Jag/LR - Ford is not actively seeking buyers. Igor Quote Link to comment Share on other sites More sharing options...
timmm55 Posted March 4, 2008 Share Posted March 4, 2008 The "stand alone" idea sounds like they want to make it more attractive to a suitor, not so closely tied to Ford where another holder could mould it to their company. It's like the pretty girl at a HS dance and standing alone....sooner or later someone will make an overture! Quote Link to comment Share on other sites More sharing options...
NickF1011 Posted March 4, 2008 Share Posted March 4, 2008 It's like the pretty girl at a HS dance and standing alone....sooner or later someone will make an overture! Unless they know her current boyfriend (Ford) gave her herpes. Quote Link to comment Share on other sites More sharing options...
sonofford Posted March 4, 2008 Share Posted March 4, 2008 As was said before - if someone offers Ford a right price for Volvo, they will consider it - but unlike Jag/LR - Ford is not actively seeking buyers. Igor They probably aren't actively seeking buyers now; they want to make Volvo more of a stand-alone entity to make the eventual separation easier. But I think the sale is inevitable. Mulally doesn't see great value in Volvo. Volvo's biggest problem is NA. They have virtually no marketing in the US and no support. It may be a reflection of how Ford management views the future of Volvo as a part of Ford. Quote Link to comment Share on other sites More sharing options...
92merc Posted March 4, 2008 Share Posted March 4, 2008 There's nothing in that article saying Ford won't be sharing platforms or technology. Just my gut feeling, Ford is going to hang onto Volvo for the time being. Keep using the tech they have on Ford worldwide cars. but operate it like Mazda. If the need should arise, or they get offered good money, they can still sell. But Ford will give it a go on their own first. Things could be worse for Volvo. They could be like Saab, who's gotten clap, crabs, and herpes from GM... Quote Link to comment Share on other sites More sharing options...
RichardJensen Posted March 4, 2008 Share Posted March 4, 2008 They could be like Saab, who's gotten clap, crabs, and herpes from GM... Meh. I think the analogy for Saab is "Invasion of the Body Snatchers". Sure the logo's still there, but the soul is gone. Also, stop and think about this: after one unprofitable year, Ford is intent on getting Volvo's house in order--can you imagine what would've happened if similar discipline had been applied at Jag? Ford fixed Jag's quality issues, but never made them toe a company line. They let Jag's management continue to pretend it was 1976 and the Series III was the best dang sedan on the market. Quote Link to comment Share on other sites More sharing options...
jpd80 Posted March 4, 2008 Share Posted March 4, 2008 I believe Volvo were profitable again in Q4 2007 so the changes may already be taking affect. Volvo's reporting this quarter should indicate if recovery is happening. Quote Link to comment Share on other sites More sharing options...
Edstock Posted March 4, 2008 Share Posted March 4, 2008 Well, there's a new XC60. Now for 40-50-60 replacements and re-organization. Volvo's challenge is perceived value, against Audi (3,4,5,6), BMW (3, 5) and Mercedes (C, E), as well as Lexus, Acura, Subaru, Infiniti and VW. Some are higher-end competitors, some are equal, or cheaper. Quote Link to comment Share on other sites More sharing options...
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