Automotive News: Ford in Talks to Sell Volvo

[RichardJensen]

Who said they don't?

Right. The perfect 'cherry' to top the earlier speculation is speculation that wasn't even speculated about in the article.

 

Bottom line is, an under the table deal with either of a pair of oddball customers for Ford's most valuable salable asset (and one which is a collateralized part of their loan agreement), is so far from likely that it doesn't even merit serious consideration.

 

Your theory appears to be that Ford was approached by one or two investors with absolutely no prior experience running a company like Volvo, and that instead of saying, "well, it's not for sale at present, but we will keep you in mind if we decide to sell it," Ford said, "gee Mr. Russian Oligarch (or Mr. State-supported Mandarin), we'd love to let you crawl all over Volvo's books and future product plans, in order to validate your offer of $6B"

 

Such a theory really does not deserve the dignity of rational opposition.

 

And, once again, this article advances an idea in direct opposition to Ford's stated status quo, and furnishes nothing in the way of proof more substantive than "sources at..."

 

Furthermore, it's from a media outlet in a country that can hardly be noted for its excellence in journalism (China).

 

Finally, while I have offered objections to the theory advanced, it does not necessary follow that the inability to prove a negative ("Ford is not negotiating with these people") means that Ford IS negotiating with them.

[NickF1011]

Once the XJ gets replaced then Jag's problems are over.

 

 

I couldn't read any further than that.

 

Hell, that's when Jaguars problems will just be BEGINNING. That's when Jaguar will actually have to figure out a way to engineer a vehicle from the ground up without the assistance it had pillaged from Ford for the past 2 decades.

[pcsario]

it's from a media outlet in a country that can hardly be noted for its excellence in journalism (China).

 

Well, actually it's a sweedish business publication owned by a multinational media group.

 

http://en.wikipedia.org/wiki/Dagens_Industri

Edited June 25, 2008 by pcsario

[RichardJensen]

currency issues

Yeah, that's not a problem with Land Rover, is it?

[RichardJensen]

Well, actually it's a sweedish business publication owned by a multinational media group.

Okay, then, it's a media source that is 6 time zones and 2500 miles away from where the decision will be made.

 

Undoubtedly Volvo would attract buyers from China. Undoubtedly some have inquired about Volvo. Undoubtedly Ford has extended them the courtesy of certain access to Volvo facilities. Just as I am certain last summer, Ford provided access to BMW execs.

 

It is certainly not wise to alienate potential buyers of an asset that you are able to divest, and may need to divest.

 

But that Ford would open a full 'due diligence' relationship with Shanghai Automotive without soliciting potentially better bids in an open and competitive process stretches the imagination, given Ford's past dealings.

 

Bottom line: there is a huge difference between formally committing to and negotiating a sale and conducting informal talks with a company in China in the same manner that Alan Mulally flew to Japan to meet with Toyota execs.

Edited June 25, 2008 by RichardJensen

[battyr]

I don't see the sale of Volvo since it is now well integrated into Ford using Ford platforms. They are well situated into markets that Ford does not sell to while using Ford platforms.

 

Ford will sell Volvo if they get desparate for cash and can get a fair price. If this become the case, they will open the sale up to all bidders to get the best price.

 

Selling Volvo to Mazda could be a smart idea. Mazda is making money and wants to have a division like Lexus. Volvo could be that division. Ford can not take money out of Mazda without pay high Japanese taxes, but they can sell something to Mazda tax free. Ford could sell Volvo and still keep it. They can get the cash and still sell parts to Volvo forever. Volvo needs to grow, but Ford does not want to put resources into managing it. The solusion is to let Mazda manage it, and model it into a Swedish version of Lexus.

[TStag]

Yeah, that's not a problem with Land Rover, is it?

 

Er we use the pound not the Euro in Britain. It hasn't gone up by as much as the Euro has recently. It's been fairly stable for a while. It's strong, but JLR will have had time to factor in it's strength. I'd even forcast a weaker pound soon so JLR may actually be able to benefit from being in a falling currency. We are having a down turn too you kinow. Also factor in Land Rover's claim that profit margins are some of the best in the business and you can see why it's not an issue. If Ford had kept PAG in tact then I would question where the Volvo Xc60 is made. Halewood may have been a better choice than Sweden.

 

 

I couldn't read any further than that.

 

Hell, that's when Jaguars problems will just be BEGINNING. That's when Jaguar will actually have to figure out a way to engineer a vehicle from the ground up without the assistance it had pillaged from Ford for the past 2 decades.

 

Could that be why they are taking on 600 new employees and using Ford to supply components on a wide range of future models (including the LRX, Freelander 7 seaters, etc)? TATA HAVE ALREADY AGREED FUTURE DEALS WITH FORD.

 

Volvo should be sold. It makes sense their situation is awfull. Thinking luxury? Thing BMW, Mercedes, Audi, JLR....etc. But Volvo? Who is Ford kidding with that one? It won't work. Mullaly sold the wrong company. Now maybe he's realising that Volvo must go.

[NickF1011]

TATA HAVE ALREADY AGREED FUTURE DEALS WITH FORD.

 

They're gonna need em. And that's still hardly any guarantee of success for JLR.

[Extreme4x4]

TStag, until TATA reports a clear profit from Jag.............. SHUT UP ALREADY.

 

Unless you didn't know it, both Jag and Land Rover sell in the US. Thus, there is an exchange problem. Does this mean you are advocating pulling out of the US marketplace. After all, financially, it would probably be a good idea.

 

Anyway, shouldn't you be gone from this forum, after all............ your "crack" (Jag and LR) are no longer owned by Ford. Please go away.

[Ford Jellymoulds]

Could that be why they are taking on 600 new employees and using Ford to supply components on a wide range of future models (including the LRX, Freelander 7 seaters, etc)? TATA HAVE ALREADY AGREED FUTURE DEALS WITH FORD.

 

Mullaly sold the wrong company. Now maybe he's realising that Volvo must go.

 

Jaguar cash sucking leech has started on TATA already they have to slash out on greening them up after just a few weeks.

 

TATA have only owned them a few weeks and they have already sucked nearly a $1.5 billion out of them they look like a real asset.

http://www.whatcar.com/news-article.aspx?NA=233467

[TStag]

TStag, until TATA reports a clear profit from Jag.............. SHUT UP ALREADY.

 

Unless you didn't know it, both Jag and Land Rover sell in the US. Thus, there is an exchange problem. Does this mean you are advocating pulling out of the US marketplace. After all, financially, it would probably be a good idea.

 

Anyway, shouldn't you be gone from this forum, after all............ your "crack" (Jag and LR) are no longer owned by Ford. Please go away.

 

Doh, why do you think Kerkorian tried to buy JLR off Ford and then told Ford to sell Volvo? Great minds think alike!

 

JLR use the Pound not the Euro in Britain and last time I looked it was weaking against the dollar from a high of 2.05 dollars to the pound. The Euro is at an all time high. JLR sells in pounds. Volvo in Euro's. The difference is that the pound was high for a long time so JLR's pricing has always been with a strong Pound in mind. The rise in the Euro is more recent. In short Volvo's been caught out. The reason Porsche and Mercedes get away with this is because the have high margins. So granted their US profits have taken a hit, but not a big hit like Volvo with it's seriously low margins. The problems at Volvo are really serious. They are now stuck with the slow selling C30 (another low margin car) and a range which is getting whipped by the competition.

 

Kerkorian knows this and I'd wager Ford now knows it too. The point is this. If you can live with the sale of JLR why not Volvo? Instead of investing cash in Volvo why not spend it on Lincoln or Mercury?

[Pioneer]

Ford should be in the real estate and asset management business...

 

 

It already is.

 

LINK

[jpd80]

Volvo should be sold. It makes sense their situation is awfull. Thinking luxury? Thing BMW, Mercedes, Audi, JLR....etc. But Volvo? Who is Ford kidding with that one? It won't work. Mullaly sold the wrong company. Now maybe he's realising that Volvo must go.

There's a big difference with Volvo.

All of Volvo's existing cars are on platforms shared with Ford and this is their great salvation.

Ford deciding to build North American plants for C1/C2 is perfect news for Volvo.

They will benefit immensely from this Ford based initiative and and further down the track evolutions

of both CD3/EUCD and D3 will find their way into Volvo production as well, more shared factories.

 

Can you imagine the cost base improvement for Volvo having cars built in efficient Ford factories?

This is something that could never be done with Jaguar/Land Rover - they didn't share enough with ford.

Edited June 25, 2008 by jpd80

[TStag]

There's a big difference with Volvo.

All of Volvo's existing cars are on platforms shared with Ford and this is their great salvation.

Ford deciding to build North American plants for C1/C2 is perfect news for Volvo.

They will benefit immensely from this Ford based initiative and and further down the track evolutions

of both CD3/EUCD and D3 will find their way into Volvo production as well, more shared factories.

 

Can you imagine the cost base improvement for Volvo having cars built in efficient Ford factories?

This is something that could never be done with Jaguar/Land Rover - they didn't share enough with ford.

 

I follow that arguement except that Ford have said they want Volvo's to contain lss Ford parts not more. Opening plants in the USA makes sense at the moment but in 5 years time? The real issue Fod have is with Volvo's profit margins they need to be more like Mercedes or BMW, then it won't matter so much. It's harder to make Volvo go upmarket than it would have been to just use more Ford parts in Land Rovers.

 

But frankly speaking and here's the thing. Now that PAG has been broken up and Ford has serious problems of it's own, now is just not the time for Ford to even have to worry about turning Volvo around.

Edited June 25, 2008 by TStag

[jpd80]

I follow that arguement except that Ford have said they want Volvo's to contain lss Ford parts not more. Opening plants in the

Completely wrong way around,

Volvo may partner with Ford U.S. on platforms, assembly

 

Volvo Car Corp. may link product development more closely with Ford Motor Co.'s North American operations, making it possible to build Volvos in Ford's U.S. plants.

 

Volvo now shares most of its vehicle architectures with Ford of Europe, Jaguar and Land Rover. But that may change, as Jaguar and Land Rover are about to be sold and exchange rate woes undercut Volvo's profitability.

 

In an interview, Volvo CEO Fredrik Arp said the Swedish company may use more parts from Ford's North American supply base.

 

"If we are sharing components and platforms, then we don't need a huge site of our own," Arp said. "But if we have our own components and platforms or share with Ford of Europe, then we have to go it alone."

 

Arp said Ford CEO Alan Mulally's "One Ford" global product development plan creates opportunities for Volvo.

 

"We have a good relationship with Ford of Europe in sharing engines and transmissions, start/stop engineering and other commodities," Arp said.

 

"But if One Ford means sharing North American and European platforms, and we had the opportunity, we could move into a North American plant."

[Cougarpower]

Doh, why do you think Kerkorian tried to buy JLR off Ford and then told Ford to sell Volvo? Great minds think alike!

 

JLR use the Pound not the Euro in Britain and last time I looked it was weaking against the dollar from a high of 2.05 dollars to the pound. The Euro is at an all time high. JLR sells in pounds. Volvo in Euro's. The difference is that the pound was high for a long time so JLR's pricing has always been with a strong Pound in mind. The rise in the Euro is more recent. In short Volvo's been caught out. The reason Porsche and Mercedes get away with this is because the have high margins. So granted their US profits have taken a hit, but not a big hit like Volvo with it's seriously low margins. The problems at Volvo are really serious. They are now stuck with the slow selling C30 (another low margin car) and a range which is getting whipped by the competition.

 

Kerkorian knows this and I'd wager Ford now knows it too. The point is this. If you can live with the sale of JLR why not Volvo? Instead of investing cash in Volvo why not spend it on Lincoln or Mercury?

 

Volvo sells in krona and they have to convert in Euros and in dollars, and Ford can help Volvo by building the C1 Volvos here in the states, BMW does it and so could Volvo

[Ford Jellymoulds]

Could that be why they are taking on 600 new employees and using Ford to supply components on a wide range of future models (including the LRX, Freelander 7 seaters, etc)? TATA HAVE ALREADY AGREED FUTURE DEALS WITH FORD.

 

The 600 new employees will be used to green up Jaguar this has sucked $1.5 billion out of TATA's bank account after just a few weeks of ownership. How many Nano's will TATA have to sell to cover this about a billion units?

 

How can you say that Jaguar are an asset it won't be to long before TATA off load them if they have got any sense.

It was the best thing Ford done getting rid of them they are already $1.5 billion dollars better off.

[FoMoCobra]

I have always felt and continue to feel that Volvo will eventually be sold (I am in favor of its sale). Its been great, but it must go overboard to keep this boat afloat. I still think BMW will purchase it.

 

The market has changed drastically and I imagine that the number of automotive brands will be shrinking substantially. A drop from 17 million to 15 million yearly sales is substantial. As long as gas prices remain where they are, that number will probably not go up. People will find alternative forms of transportation.

 

my 2 cents..

[NickF1011]

I have always felt and continue to feel that Volvo will eventually be sold (I am in favor of its sale). Its been great, but it must go overboard to keep this boat afloat. I still think BMW will purchase it.

 

The market has changed drastically and I imagine that the number of automotive brands will be shrinking substantially. A drop from 17 million to 15 million yearly sales is substantial. As long as gas prices remain where they are, that number will probably not go up. People will find alternative forms of transportation.

 

my 2 cents..

 

It may be sold off eventually....at this point I think it'll be awhile though. As for BMW, it may be a good fit for them in a long run, but right now BMW is dealing with their own financial pressures. I doubt they're in position to be buying anyone.

[Go West Young Man]

Volvo sells in krona and they have to convert in Euros and in dollars, and Ford can help Volvo by building the C1 Volvos here in the states, BMW does it and so could Volvo

 

Seems to me KCAP would make a great C2 based campus: Focus, C-Max, Kuga. Dont count out Volvo, as mentioned, along with Mazda. With the weak USD Mazda could easily shift some Americas bound C based product (3,5, CX7) to the US.

[TStag]

I have always felt and continue to feel that Volvo will eventually be sold (I am in favor of its sale). Its been great, but it must go overboard to keep this boat afloat. I still think BMW will purchase it.

 

The market has changed drastically and I imagine that the number of automotive brands will be shrinking substantially. A drop from 17 million to 15 million yearly sales is substantial. As long as gas prices remain where they are, that number will probably not go up. People will find alternative forms of transportation.

 

my 2 cents..

 

I think your dead right. In a sense selling Volvo is a bad move because they are making the right kind of models for the US market, in that people are migrating away from Trucks to cars. But Volvo will need a lot of investment to turn around and I think that's something Ford just can't afford right now.