The New York Times is reporting that Ford is expecting to wrap up its sales of Jaguar and Land Rover by September 30, and of Volvo by the start of winter. Fresh off its shedding of the majority of Aston Martin, Ford has made the decision to rid itself of a majority of shares in the other premium brands under its corporate halo. The legal and financial people have already started working on the bidder information packets, according to Times sources.
While the Jag/Rover sale has been public for a little while, it wasn't until just last week that Ford publicly acknowledged it was looking for bids for Volvo, which they've controlled since 1999. Jaguar was purchased in 1990 and Land Rover a decade later in 2000. Among the bidders for Jag/Rover are recent Chrysler Group buyer, Cerberus Capital Management, as well as TPG and Tata Motors. Although BMW has been mentioned as a possible suitor for Volvo, it's still too early in the process to get a list of names together.
[Source: NY Times via just-auto, sub. req.]
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Reader Comments (Page 1 of 2)
Drewboy @ Aug 3rd 2007 5:40PM
Selling Volvo? That's lame. I kinda liked the idea of a US make owning Jaguar and Aston Martin as well. I think selling Volvo would prove to be a mistake!
Castle @ Aug 3rd 2007 6:08PM
Unfortunately, Ford needs the money for reconstruction immediately. Recently they borrowed $18 Billion in financing. They need the money.
http://www.newsmax.com/money/archives/articles/2006/11/27/090627.cfm
Also, publicly the profitability is unknown. Ford only releases the financial data of the entire PAG(Premiere Auto Group) and not separately by brand. Analyst consensus has been that Volvo is profitable but exactly how much is a question.
I'm sure whatever it sells it for won't be cheap.
Rambo @ Aug 3rd 2007 6:54PM
Leave it to the New York Times to twist the facts. Ford has said it doesn't plan on selling Volvo. The sale of Jaguar/Land Rover is going to happen soon. Why do these newspapers constantly make false claims and are never held liable by their readers.
Castle @ Aug 3rd 2007 11:32PM
Original story comes from the Wallstreet Journal, not the NYT. Also, been reported by pretty much every reputable news outlet.
http://online.wsj.com/article/SB118451079153266913.html?mod=googlenews_wsj
http://www.marketwatch.com/news/story/volvo-sale-could-help-ford/story.aspx?guid=%7B15A9BE41-896F-413C-BB45-21F4B15B7A7E%7D
TriShield @ Aug 3rd 2007 5:53PM
Ford doesn't really have a choice in the matter. They need the cash infusion from Volvo's sale to simply stay in business.
Totalfixation @ Aug 3rd 2007 6:03PM
I though Volvo was at least doing good out of the three. Considering That Volvo doesn't just make cars, they make big rig trucks. I dont remember where i hear this, but the sales of the Volvo truck division was helping Ford make foot way into the trucking industry.
That One Person @ Aug 3rd 2007 6:31PM
If I'm not mistaken, Ford doesn't own Volvo's truck manufacturing arm...just the cars. Volvo actually deals with a lot of commercial applications (heavy equipment, marine engines, etc.).
Ford DID own Sterling at one point...which is now owned by Chrysler. Also, Volvo's Truck Arm owns Renault Trucks and Mack Trucks.
But out of the whole PAG group, Jaguar is the only one losing money. Personally, I think Ford should hold onto Jag. I could see things picking up after the XF comes out.
1337 @ Aug 6th 2007 10:30AM
Chrysler owns Sterling? The only Sterling trucks I have ever seen are rebadged Ford F-700s and F-800s.
ford guy @ Aug 3rd 2007 6:13PM
Although I agree with sentiments about not loosing volvo, Ford's already gotten all it would need from those brands tech-wise. Toyota, Honda, Nissan, etc all are doing well only owning 2-3 brands. Maybe this cash infusion will help them move Lincoln way up market to be a Jag/Volvo competitor in a way that they couldnt before owning three brands in the same segment. Then Mercury may be able to move up to compete with the Acura/Infinity/Lexuses etc. Dreams dreams dreams...
TriShield @ Aug 3rd 2007 6:33PM
Volvo's position is what makes Ford want to sell them as they may bring the most money. Money that is vital to Ford's operations. Even with PAG sold off Ford can barely afford to invest in Mercury and Lincoln.
B @ Aug 3rd 2007 6:47PM
Hmmmm....I can understand Jag and Rover. I still cannot wrap myself around Volvo.
To me, it is a perfect fit. Volvo offers world class safety (and that reputation) to all Ford brands. They are not quite luxury and thus fit very well somewhere below Lincoln (assuming Ford ever gets that brand to where it should be). The synergies between Sweden, Dearborn, and Hiroshima seem to be about perfect. And I believe Volvo is making money.
The ONLY thing I can possibly imagine is that Volvo is probably worth a lot of money, and Ford needs today-cash and not tomorrow-profit. Crap situation to be in, but it is what it is. $$ has to be the only reason they want to get rid of Volvo.
So now that this is going to happen, where will Ford go now? What's left? Ford, Mercury, Lincoln and Mazda, right? Does this mean Mazda might be on the chopper too? Sure they share a lot of platforms and engines across the lines, but if Volvo can get sold despite their obvious advantages and image, why couldn't Mazda also end up getting sold? Or, will Ford use the cash to bring Mazda completely under the umbrella? I believe they own about 35% of Mazda currently, though I don't know what bringing that to 100% would accomplish....
I've also heard Mercury will not be replacing the Milan when the next generation Fusion arrives in a couple of years. Me wonders if Mercury is going to get the axe. It might make a lot of sense actually. Ford is the everyday brand. Mazda is the more youthful/sporty brand, and Lincoln (assuming they fix it) is the luxury brand. Mercury hasn't had a place for a long time, and if they're into selling/axeing a bunch of brands, why not take care of Mercury in the process?
Now maybe Ford will keep a stake in Volvo. Maybe they will somehow make it in the sales terms that they still get use of the Volvo safety facilities, etc. Just because they sell a brand doesn't necessarily mean they can't keep bits and pieces of it. Heck, Ford could even sell everything at Volvo EXCEPT the safety engineering. Perhaps that will be the deal. Isn't that what happened with Chrysler? DCX keeps 20% of the stock or something, and they'll continue to share on upcoming engines and platforms already in the works? I believe some other company did the same where they sold off a brand but kept the diesel engines. It isn't all for nothing.
Anyway, if Volvo gone, I'm gonna say Mercury is gone too.
Ben @ Aug 3rd 2007 7:52PM
I have to agree with your asessment of the situation. It seems to me that the relationship between Ford US, Mazda, and Volvo are about as tight as they can be. A simple look at the Wikipedia entries for the Ford small and midsize platforms (C1, CD3) will tell you how much they are sharing. However, I just saw an article over on Inside Line (http://www.edmunds.com/insideline/do/News/articleId=121966) that says that Ford will be consolidating ALL brands (Ford, Lincoln, Volvo, Mazda) on the new EUCD platform which was engineered by Volvo off of the C1 platform that underpins the Mazda3 (according to Wikipedia if you can believe it). They give the reason for Volvo developing the EUCD platform instead of using the Mazda6/Fusion/Milan CD3 platform was that the CD3 wouldn't accomodate Volvo's straight-5 engines. *If* that's true...and Ford is getting rid of Volvo, then why not keep using the CD3 platform and continue to develop that? Obviously Mazda has some expertise in developing platforms as almost all current Ford platforms have some basis in Hiroshima.
It seems like Ford has been using its Japanese partner as an R&D house for a while now. Mazda does all the heavy lifting for Ford and Ford gets to exploit it poorly in the US.
Just my opinions!
Ronald @ Aug 4th 2007 8:39PM
I say Axe Mercury AND Lincoln. Lincoln doesn't have even ONE CAR that isn't just rebadged Fords. And Mercury is just a pain to look at, because they are the same as Ford. REBADGED! And I think that already would generate money, because of less brands, so less equipment. That means close, or slow, or even combine factories to bring costs down. Then cut salaries on the top and the bottom. KEEP VOLVO and Mazda. I don't see why you would shoot yourself in the foot so early. I know Ford needs money asap. However Selling volvo is just going to make things bad int the future (like when that money generated from the sale runs out). Ford needs to use more MAZDA parts also (AND NOT THE OTHER WAY AROUND).
Oh, and I should mention that as of 2007 (and way before I think), It is against Japanese law for a foreign company to purchase more than 30% of a Japanese company. It really sucks, but it is another way for those Jappo, penny pinchers to protect their interests and their companies. The U.S. needs to be the same way to them then, also...
When ford does get back to profitability, then it needs to network and combine interests with other companies, like Renault-Nissan, Fiat, and Even PSA, to jointly develop a vehicle or two. It can WORK!
Jeff @ Aug 3rd 2007 6:49PM
Hey, if it ends up killing Ford, I'm all for it.
I'm happy with GM and Chrysler surviving though; they deserve to more than the blue oval.
AlexP @ Aug 3rd 2007 7:10PM
lol? Chrysler is probably the only one that isn't improving out of the 3, we'll see how radically things change with Cerberus in charge, though.
Hopefully improvements on the assembly line and redesigned interiors for most of the cars in a year or two - feels like they haven't even moved out of the 90's yet... I mean, plastic wise...
MH @ Aug 3rd 2007 7:12PM
Ford doesn't own any part of Volvo Corp.
It was actually Volvo Corp that bought Ford's mid-heavy truck division some years ago.
Volvo Corp sold their Volvo Car division to Ford in 1999 because they believed that the price of developing new platforms for new models was to high for a relatively small car manufacturer.
Volvo Corporation is a Swedish company that manufactures Heavy trucks, Construction Equipment, Marine Engines as well as parts for commercial airliners (wing, fuselage and engine components). They also operate an extensive financial operations division.
Volvo Corp owns a whole bunch of truck and heavy equipment manufacturers.
For example;
Mack Trucks, Renault Trucks, Samsung Heavy equpment and Nissan Diesel etc. are all controlled by Volvo.
They are in fact the worlds second biggest heavy truck manufacturer second only to Daimler AG (Mercedes-Freightliner)
It's actually Volvo Corp that owns the Volvo trademark, they only license it to Ford for use in personal cars.
Jon @ Aug 3rd 2007 10:59PM
Dear Volvo,
Farewell, we will miss you. You have contributed greatly to the FoMo. Before you came along, our cars blew up, rolled over, and drove like grocery carts. Now, some 5 or 10 of Ford's models are on a Volvo platform with Volvo safety engineering. Now most Fords get 5-star crash test ratings, and it's all because of you, my Swedish fancy. To think that they would ever want to get rid of you. Well, you know what they say... the grass is always bluer...
So tata (npi) my old friend, you will be missed.
Devin @ Aug 3rd 2007 11:16PM
I think i'm finally starting to understand the process in Ford's thinking. First, intruduce a concept of a "4 door coupé" ala Aston Rapide, and Jag XF concepts. Then Ford decides they will build the concepts. Then Ford sets the respective companies on the block and the winning bidder gets a company that is coming out soon with a very hot car. So, at this years detroit show, maybe we should expect a volvo 4 door coupe?
robz4 @ Aug 3rd 2007 11:38PM
I hope BMW gets Volvo.Even though there is some overlap in the products they offer in Europe and North America I think both companies will benefit from the synergies that such an union will create.They are both very focused companies with a very clear direction and a very different brand image that caters to a different buyer (specially in the USA and Canada).They also have an immense and very capable engineering resources. If everything works out we should see better products coming down the pipe from both of them.
Will @ Aug 3rd 2007 11:58PM
This must be why that euro designer went to land rover... he wanted out of the company.