Ford to Sell Volvo???
Ford looks to sell the last of its 1990s car company acquisitions: Volvo. But to whom? That is the burning question, in my book. From MarketWatch:
SAN FRANCISCO (MarketWatch) — Ford Motor Co., pinched for cash and struggling to turn sales, said Monday it’s considering the sale of Volvo, the last brand left from its stable of luxury European nameplates that once included Aston Martin, Jaguar and Land Rover.
Ford (2.55, -0.14, -5.2%) said the move is a response to the steep decline in the global auto industry and the brutal economic climate worldwide.
And from this story we see that the Ford CEO, interestingly, doesn’t want to ask American taxpayers to put money into a Ford that still owns Volvo:
Mulally has apparently concluded that his part of the plan should not include asking American taxpayers to pump money into a company that includes Volvo, whose October sales fell a staggering 52% from a year ago.
But what about a buyer? In this financial climate, won’t it be hard to find a buyer with cash to take on Volvo’s operating expenses?
But selling off Volvo leaves several thousand jobs at the company’s Gothenburg assembly line in the lurch, not to mention jobs at suppliers scattered throughout Europe. Given the dismal state of the global auto industry and the general lack of cash available to swing an acquisition, the likelihood of finding a buyer for Volvo any time soon is remote.Swedes overwhelmingly favor restoring Volvo to its “proper” ownership. That would likely require the government to step in with a bridge loan and partial ownership. There is considerable pressure on Swedish lawmakers to make it happen.
There is speculation in the Swedish press that Renault, Kia or some other Asian carmaker could be coaxed into a consortium of Volvo owners that include the Swedish state — at least for a while. But stitching together a consortium takes months, even years, and time is of the essence.
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