• May 5, 2008
Kirk Kerkorian's associate Jerry York stated last Thursday that Ford would do well to sell Volvo and extinguish Mercury. Coincidentally (or not) Ford's stock zoomed up to one of the highest price levels it's seen in the last six months. Tracinda Corporation, Kerkorian's firm, has expressed faith in Mulally's leadership and his plan to strengthen the automaker. There has been speculation about a sale of Volvo in the past, and punditry has been begging the Blue Oval to do something with Mercury, or put it out of its misery, for years.
While York seems certain that Volvo will be on the market in less than two years time, Ford continues to state that the Swedish subsidiary is not for sale. Looking at the Premier Auto Group shuffle of the last year, though, it could certainly be deduced that Volvo will indeed go on the market soon. Moving the brand out of the PAG location in Irvine, CA and back to Rockleigh, NJ, where Volvo had set up shop when it first started selling cars in the United States, is a move that set off whispers of impending sale. While it might be nothing more than right-sizing office space for Volvo now that the rest of the Premier Auto Group is gone, a cross country move is a deft way to trim operational fat without layoffs, and divorcing Volvo's North American operations from Ford locations makes an ownership transition easier, too. While Ford and Volvo products share a lot of engineering and parts, a well-negotiated deal wouldn't preclude a sale that gently phases out the currently entwined platforms as they age and replacements are brought to market.

[Source: Automotive News - sub req. - Photo: Bloomberg]


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  • 12 Comments
      • 6 Years Ago
      Volvo has been good for Ford tech wise and it is not the money pit the other PAG brands were. I think it would be a shame if Ford had to let it go. But let's face it they have mortgaged every asset they have and nothing is sacred. If the turn around continues to be sucessful I think they will keep Volvo. If on the other hand things go south and they need cash it will be up for sale. Mercury on the other hand is just dying a slow death of neglect. They would pull the plug but after what it cost them to kill Mercury in Canada and GM to kill Olds they can't afford it. So they are going to neglect it to death. A real shame because the brand still obviously has value.
      • 6 Years Ago
      I do not buy the "Volvo is too integrated with Ford" hence it cannot be sold argument. Manufacturers share platforms all the time. Ford, Fiat and PSA have common models between them but are all independent companies. Volvo will be sold. The reason it has not is that no one is buying. BMW was interested a while back but there are cheaper ways for them to resurrect the Isetta brand. Last in the news was that a Chinese brand was sniffing around. To all the Volvo guys out there, watch out for the little things. The dead giveaway would be if Ford starts tampering with your IT (ordering system) and if HR starts interviewing more often than not.
      • 6 Years Ago
      Mercury could be the hybrid car division of Ford. As a brand that has been a favorite of women, it would offer them good fuel efficiency and if the performance is not too spirited, they would not mind as long as the cars are practical and cheap to use over the long term.

      Would Ford do it? Looking at the clunkers that they have been putting out, I doubt it. This is a company doing its best to destroy itself.
      • 6 Years Ago
      Where is the official statement saying that Ford will not sell Volvo, with this topic on and off constantly
      Mullally is not an idiot, he knows better that volvo is a very important asset, and if the company wants to survive then it must keep it.
      Screw mercury if Ford is not rebadging Euro Fords.
        • 6 Years Ago
        Volvo, unlike Jaguar and Land Rover, is essentially integrated into the Ford portfolio fairly well. The S80, V70, XC70 XC60 are EUCD variants (Ford Mondeo), the S40/V40 and C70 are C1 based (Euro Ford Focus) and the XC90 is D3 based (Ford Taurus/Sable/Taurus X/MKT/Flex/MKS). So no I don't expect the brand to go anywhere anytime soon. The move to NJ struck me as a realignment (time wise) with offices in Sweden. I can only imagine what that building is worth in Irvine, as it is right smack dab in the middle of a prime location (5 and 405 split) and I imagine Ford Land wanting to do something with it.
        • 6 Years Ago
        Good point nero. Mercury could become Ford's Saturn, with Rebadged Euro models, that they actually could charge a premium for.

        That, or make it your performance (sports car) division. When you think of it, Ford doesn't really offer a sports car here in the US. I like the 'Stang, its not really a sports car. Its sporty, but not a true blue sports car.
      • 6 Years Ago
      Lincoln should be moved back to the PAG with Volvo
      • 6 Years Ago
      I think that Volvo is a good brand for Ford to hang on to. It is a brand that can be the volume seller that they need, unlike Jag, AM, and Range Rover, which are not and never will be volume sellers. As long as Ford doesn't try and take Volvo too upmarket, and keep a lower high range model, with unique features, it can survive. And the trickle down effect of Volvo's safety technology into the rest of the Ford line-up would be a great thing to see. Maybe in the future it would be good for Ford to let the brand go, but for now I can see it as being a good decision.

      As for Mercury, unless ford is willing to invest the money that is needed to transform it into a brand that means a little more than a Ford with leather and different badge as it is now, there is no need to keep it around. I'm thinking that making it what Pontiac is starting to become in the GM lineup would be an interesting move, but other then that I don't see the future of Mercury at Ford.

      Just my 2 cents.
        • 6 Years Ago
        Cole is right; Ford will not sell Volvo. Volvo has long been the only profitable branch of PAG, and Ford has no premium brand without Volvo.

        That said, Volvo's model growth is limited. If the VW Phaeton proved anything, it proves that if you build it, they won't come if its on sale from a brand that lacks cachet of that price point. That is why the S80, at 50k, is Volvo's top-of-the-line. And that's fine.

        After Volvo increases the richness of the S40/V50 interiors, releases a new S60, and upgrades the T5 engine, Volvo sales will really takeoff.
        • 6 Years Ago
        But what will it cost to actually bite the bullet and terminate mercury? Look at GM's costs associated with killing Olds (which they are still paying). It may be more efficient to simply keep only the sable (which as far as I can tell is the only one not promised the ax) and let the Lincoln / Merc dealerships just deal with not having any other Mercs. No?
        • 6 Years Ago
        Volvo is continuously losing money. Unless Ford has extra cash laying around to improve Volvo's performance within the next two years, I would encourage them to sell it. Otherwise it'll be a drain on Ford's resources and will hurt Volvo as well.
      • 6 Years Ago
      Is anyone else reminded of Monty Burns and Mr. Smithers whenever these two chaps pop up in the news?