Ford mulls Volvo sale
AFP/The Local · 1 Dec 2008, 15:40
Published: 01 Dec 2008 15:40 GMT+01:00
- Ford and GM seek Swedish aid: report (01 Dec 08)
- Poll: Swedes in favour of Volvo nationalization (29 Nov 08)
- Volvo Group willing to help troubled Volvo Cars (27 Nov 08)
Ford Motor Company said in a statement that the decision to review strategic options for Volvo Car Corporation came "in response to the significant decline in the global auto industry particularly in the past three months and the severe economic instability worldwide."
Ford said the review probably would take several months to complete.
"Given the unprecedented external challenges facing Ford and the entire industry, it is prudent for Ford to evaluate options for Volvo as we implement our ONE Ford plan," Ford president and chief executive Alan Mulally said in the statement.
The beleaguered Swedish carmaker Volvo said it was not surprised at news that the US auto giant was mulling selling it in the face of an industry-wide crisis.
"We understand they have to evaluate a number of different options. What will happen exactly, we don't know," Volvo Cars spokeswoman Maria Bohlin told AFP, adding that Ford had not informed the unit that it could soon be up for sale.
"There has been speculation about this for a long time but we don't know. We have to wait and see what happens," Bohlin said.
The Volvo group, which includes heavy truckmaker Volvo Trucks, sold Volvo Car to Ford in 1999. The US automaker is on the brink of collapse amid the global financial crisis.
The struggling Swedish unit, which has announced thousands of job cuts in recent months, posted a net loss of $458 million in the third quarter.
Volvo chairman of the board Finn Johnsson recently told Swedish financial daily Dagens Industri that his company was not interested in buying back Volvo Car and voiced opposition to calls for the Swedish state to acquire it.
"The state knows nothing about the car industry and Volvo needs an owner that can increase sales and cooperate with suppliers on components and development," he said, suggesting French carmaker Renault as a good owner for the Swedish company.
Ford launched a major restructuring plan in 2006 to boost productivity and gradually transform its product portfolio to increase the share of compact and energy-efficient models.
Ford, which lost $129 million in the third quarter of this year, has along with General Motors and Chrysler pleaded with US lawmakers for a multibillion-dollar rescue for their crippled industry.
Executives of the "Big Three" US automakers are expected to return to Congress on Tuesday to argue their case.