Ford selling Volvo ... fuck

[argatoga]

http://www.autoblog.com/2008/05/20/f...prep-for-sale/

I'm not sure if this is a good idea, being as Ford and Volvo do a lot of platform sharing.

Volvo, once the success story in Ford's Premier Automotive Group, has hit choppy waters. And according to Wall Street Journal insiders, Ford is preparing to treat the Swedish automaker the same way it did the English ones: slap some floaties on it and keep the brand bobbing long enough to sell it.

Volvo made $94 million in profit in Q1 of 2007, but lost $151 million in Q1 of this year. In total, over the past two years, the once smiling Swede has lost $1.7 billion, part of which is due to exchange rates, and another is due to selling fewer cars. To combat the decline, Volvo is shedding up to a third of its work force at one European plant, and cutting back on production at another. As you would suspect, both of those plants make the largest vehicles in Volvo's lineup.

A couple of weeks ago, Ford was intriguingly -- or deceitfully -- still in "Volvo's not for sale" mode. Now it appears that Mulally has admitted to some Ford execs that Volvo is about to wear the "Needs a Caring Home" sign. Jerry York, the right hand man of Kirk Kerkorian, maintains that Volvo will probably be sold in 18 months. The way things look now, we'd be surprised if it took that long.

[Meio]

They seem to be selling their European acquisitions pretty fast.

[prizrak]

Makes sense, Ford is struggling to turn a profit. Also Volvo "big cars" are not the most popular stuff on the road (at least not in the US).

[BerserkerCatSplat]

Unfortunate, but not entirely surprising.

[anti-net]

what are they going to sell next? Ford Europe? I know Volvos don't sell much in the US, but they sell a lot here. doesn't make that much sense to me.

[CrazyRussian540]

Hopefully they'll sell it to BMW. If I'm not mistaken, BMW was interested in buying Volvo from FoMoCo a few years ago.

[anti-net]

Originally Posted by CrazyRussian540

Hopefully they'll sell it to BMW. If I'm not mistaken, BMW was interested in buying Volvo from FoMoCo a few years ago.

I was under the impression that BMW was not buying any other firms after the Rover problem.

[fbc]

Not surprising, but I can't help but see it as a short-term gain for a long-term loss (as with selling Jaguar).

[argatoga]

Originally Posted by anti-net

I was under the impression that BMW was not buying any other firms after the Rover problem.

BMW was thinking of buying Volvo a couple years back. I wouldn't call the Rover situation a problem, they did get Mini.

[Cobol74]

Volvo madras with rice please?

[Meio]

Originally Posted by prizrak

Makes sense, Ford is struggling to turn a profit. Also Volvo "big cars" are not the most popular stuff on the road (at least not in the US).

Only makes sense in that they are obviously trying to liquidate some assets to pay some debts (and they are obviously unlikely to sell the Ford marque) as as far as I know Volvo and Jag/Landy were profitable.

[Cobol74]

Jag profitable? Nnot so much I think, but I wonder about management fees and cost of R&D being apportioned? Anyhooo, uncertainty is not good for any company & poor workers being laid off through no fault of their own, not nice.

[teeb]

Originally Posted by prizrak

Makes sense, Ford is struggling to turn a profit. Also Volvo "big cars" are not the most popular stuff on the road (at least not in the US).

They get a lump sum of cash each time they sell a subsidiary (AM, Jag/LR, Volvo) as opposed to a steady trickle of cash in (well, cash out in Jag's case). I guess they're just pretty short for money at the moment.

Originally Posted by anti-net

what are they going to sell next? Ford Europe? I know Volvos don't sell much in the US, but they sell a lot here. doesn't make that much sense to me.

Ford Europe's making a healthy profit, they really would be mad if they sold that.

Originally Posted by CrazyRussian540

Hopefully they'll sell it to BMW. If I'm not mistaken, BMW was interested in buying Volvo from FoMoCo a few years ago.

Problem is, where would Volvo fit in with BMW? Most of their range are competitors. The 1 series rivals the C30, the XC90 the X5, the big saloons the big saloons, even the C70 rivals the 3-series convertible.

With Rover, the cars didn't really directly compete in the same market (Rover - cheap superminis to mid-range saloons, plus Mini).

[watisdis]

I actually did a mini essay about the new FoMoCo this last semester. From what I gathered, Ford is not being short sighted or selling profitable branches. Alan Mulally, the new CEO is trying to make Ford a one brand company (for the most part). The reason behind this is so they can focus on the the Ford brand exclusively. All their efforts and funding will now only support Ford. They're also dissolving Mercury, so getting rid of Volvo is no surprise. The only brand not getting the boot is Lincoln, that's it. So you see Ford isn't loosing their heads, just their old business strategy.

[Wizegui]

It might not necessarily be a good thing for Volvo, but it'll be a good long term decision for Ford. By selling Volvo and all their acquisitions of the 90's. they can finally spend more money on developing and polishing their own brand of cars and not on their other brands. Imagine Lincolns that were Lincolns, and not Fords with an excess amount of chrome and wood! This could really be interesting. The ideal position for Ford now would be Ford, Lincoln, and maybe Mazda (they seem to be a realitively profitable unit judging from what I've seen over these past few years). It'll be interesting to see how this turns out.

[prizrak]

Originally Posted by Wizegui

It might not necessarily be a good thing for Volvo, but it'll be a good long term decision for Ford. By selling Volvo and all their acquisitions of the 90's. they can finally spend more money on developing and polishing their own brand of cars and not on their other brands. Imagine Lincolns that were Lincolns, and not Fords with an excess amount of chrome and wood! This could really be interesting. The ideal position for Ford now would be Ford, Lincoln, and maybe Mazda (they seem to be a realitively profitable unit judging from what I've seen over these past few years). It'll be interesting to see how this turns out.

Mazda seems to be there to stay, they seem to be their main small car brand. I see quite a bit more of them than I do of the Focus and such. I think Ford might end up like this.

Mazda - speedy/efficient smallish cars and crossovers (those are probably going away) and minivans
Ford - full sized sedans, SUV's, and work trucks, probably big work vans.
Lincoln - well duh

[Spectre]

Originally Posted by Meio

Only makes sense in that they are obviously trying to liquidate some assets to pay some debts (and they are obviously unlikely to sell the Ford marque) as as far as I know Volvo and Jag/Landy were profitable.

Jaguar never turned a profit at any point under Ford ownership. In fact, they had successive billion-dollar and significant-fraction-of-a-billion-dollar losses in recent years.

Land Rover only recently had started to turn a profit under Ford.

Also, the big "Volvo Platform/Ford Badge" story, the Five Hundred/Taurus, has not sold well at all and nobody wants one.

Finally, Volvo USA invested heavily in SUVs and marketing for them (sound familiar?) so now that gas prices are on the rise, the popularity of their expensive SUVs is on the wane. Unfortunately, Volvo did this to the point that they neglected their other lines (like cars) so nobody wants one of those in the US, either.

I suspect that if European Volvo sales were any good, they wouldn't be selling - but they're probably not enough to be worth keeping the brand *and* the shareholders have had quite enough of Ford's excursions with foreign marques that don't make money (Jaguar and now Volvo).

[Meio]

Originally Posted by Spectre

Land Rover only recently had started to turn a profit under Ford.

Landy were profitable under BMW, cost Ford 3 billion and made them a billion last year. They are being lumped in with Jag as a sweetener. If I remember right Tata only wanted Landy and wanted Ford to redivide the marques.

[Spectre]

Um... BMW *sold* Land Rover to Ford because they were *losing* money on it. At the time of sale, LR was in the hole to the tune of about $465 million. The entire Rover conglomerate, as I recall, was *losing* a billion USD per year as a whole.

http://www.minimania.com/ArticleV.cfm?DisplayID=571

From http://www.businessweek.com/2001/01_10/b3722119.htm, back when Ford bought LR:

FIXER-UPPER. Ford also has to find a way to make Land Rover profitable, something its previous owner, BMW, couldn't do. Land Rover isn't as bad off as Jaguar was when Ford purchased it in 1989, but company execs estimate that it will take as long as two years just to shore up the British auto maker. Long term, the plan is to share platforms with Ford's trucks to lower costs and improve quality. For now, growth will come from the addition of lower-priced models, such as the Freelander, which debuts in the U.S. later this year.

Rover as a whole, under BMW, pretty much made NOTHING but losses after the first couple of years.

[flyingfridge]

Good, volvo is dead weight that needs to be shed. The only downside is that Ford will lose access to the Turbo 5 cyl. but then they might keep access to that as part of the deal.

So good riddance to bad rubbish.