• May 20, 2008
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.

[Source: Wall Street Journal via Yahoo!]


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  • 30 Comments
      • 6 Years Ago
      How to make a thriving, reputable, automaker into a stinker within a decade or two? Sell them to America for a few years...
        • 6 Years Ago
        Thriving and reputable? You must be talking about such cash cows like Volvo, SAAB, Rover and Fiat. None of these have made a dime before they were taken over.
        • 6 Years Ago
        Like Diamler did a better job with Chrysler.

      • 6 Years Ago
      I completely agree with you if you look at the cars in the european midsize luxury segment the Volvo S80 is a force to recon with still. THe S80 has the best in class interior only comparing with the Audi A6. When it comes down to performance the S80 is now BMW 5 series with bases petrol pots but it still has class competitiveness. The V8 model S80 goes head to head well with other V8's in the class when it comes down to speed but you must remeber that Volvo is not a sporting brand. Personally if I had to pick of all these cars in the segment I would take the Volvo S80 or the Audi A6. Now between those two I love the S80 a bit more because of its non showy luxury its very suttle and classy. Saab likes to talk about Scandanavian luxury but I dont see it in the 9-5 nor any of their vehicles. Saab take a lesson from Volvo and BMW too, learn how to eliminate some of the tech in the cars.
      • 6 Years Ago
      I am not especially in love with the S40 nor the S60.
      However, I would take a loaded up S80 over any E-Class or Mid Level BMW. To the person who said the S80 cannot keep up, you have no clue!! The S80 is a V-8 with All Wheel Drive and a 6-Speed Gerartronic Automatic with the option of 20" rims/wheels and leather interior that far surpasses the competitors. The options available are unique, and the ride the car offers is very smooth & forgiving. Fantastic sound system, DVD / TV tuner, and so so much more. Loaded with every single option her MSRLP is $60,511, and you can get $3,300 off bringing it down to % 57,211. Some of you need to spend some serious time checking out a loaded S80 V8 AWD. soon.
      • 6 Years Ago
      I still think that it would make sense, from a strategic standpoint, for Ford Motor Company to keep Volvo.

      BUT (and I repeat but) given the fact that they haven't shown any savvy whatsoever in managing Volvo or any other premium brand in its portfolio, Ford should get rid of it.

      The other problem is that Volvo is really a niche premium brand that has limited appeal. The vehicles themselves are fine. To really make Volvo work, it would take considerable effort and patience over the next decade to make it work. And the problem is that Ford doesn't have that much time.
      • 6 Years Ago
      Expect the Swedish government, a couple of Swedish biilionaires and Volvo management to step forward and put forth a purchase plan within 3 to 6 months. Because Ford relies much more heavily on Volvo for R&D than it did Jaguar/LR, it won't be a complete split. Probably more in the Ford/Mazda 65/35% setup.
        FEW
        • 6 Years Ago
        Agreed, much like mazda, Volvo is better for ford than ford is for volvo.
        • 6 Years Ago
        I also agree, it would be more safer for Ford to keep a smaller stake in Volvo (like 25-35%) then selling completely to someone else.

        #1 Avinash machado, BMW tried once to buy another automaker, the Rover group in the 1990s but it wasn't successeful. And the irony, there was some attempts of a merger between Renault and Volvo in the early 1990s but it was before the beginning of the privatization of Renault.

        There a French article from the French newspaper Le Figaro who mentionned then Kerkorian probably wants Ford to "marry" another automaker. Possibly Renault-Nissan for some analysts but Carlos Ghosn said he don't want to invest in a entreprise still controlled by a family. http://www.lefigaro.fr/lefigaromagazine/2008/05/10/01006-20080510ARTFIG00547-ford-kirk-et-carlos.php

      • 6 Years Ago

      Well I hope Volvo goes back to European hands. Renault or BMW might make good owners.
        • 6 Years Ago
        I very muchly agree with you.
      • 6 Years Ago
      No suprise here.

      I've owned three V70 Cross Countries.

      The new model stinks. It's heavier, has a less powerful engine BUT...gets even worse gas mileage than the previous model.

      Now remind me....why would I buy one again???
        • 6 Years Ago
        John L. . . . I agree with you!
        • 6 Years Ago
        IMO the problem is that volvo marketers in the us, including
        ford keep positioning volvo as a luxury brand. sure they
        have luxury cars, but they ought to sell some more basic
        models as they do in europe. ad some with smaller more fuel efficent engines. come on a 5 cylinder engine in a c30?
        a 1.8 4 tuned approriately could make it a commuter car of choice. how about some of that volvo practicality!!
      • 6 Years Ago
      it will be good for volvo to be out of ford umbella; ford poor reliability had drag volvo down along with it with the sharing of cheap parts. i still remember the good old days when a volvo last forever, remember the volvo 240? what a great car!
      • 6 Years Ago
      Ford just needs to shed everything that is a distraction. Get back to their core brands and put all of that scattered energy into the main three.
      Align Mercury with the Scion/Saturn crowd with focus on performance. Bring Lincoln up several notches to the Infinity/Lexus level. And finally, refocus on the original Henry Ford purpose for the car line - bring reliable, technology to the masses at an especially affordable price.
      Many quality car companies have acheived such a great respect in part because they focus on doing one, or just a few things very well. The American monster companies have not been able to reach their goals because they have been trying to hard to make a profit by pleasing as many people as they can.
      • 6 Years Ago
      I think since Ford acquired Volvo many mistakes have been made with the brand. It's styling has moved away from conservative, squarish boxes that initially made them popular (ironic this is now coming back with stuff like Scion & a lot of the smaller SUV's) to ugly bulbous stuff with huge Mitsubishi type tail lights. Ford attempted to move Volvo even more upmarket, to the point where a loaded Volvo cuts into the territory of a BMW or Mercedes. (Which would you rather have?) They need to get back to making more affordable transportation. If they could build a nice product for under $30k loaded it would sell like hot cakes. $50k Volvos are an entirely different story and quite rediculous when you think about it. No wonder so many of those buyers from the 1980's have defected to other brands.
      • 6 Years Ago
      wow! ive worried about Volvo a long time..lost their direction..is it possible for AB Volvo to buy them back???God forbid Renault..VW would be cool..but I wished Volvo was still..Volvo...maybe a the Svenska Riksdag and a couple of forrmer ABBA members will!! mamamia
        • 6 Years Ago
        AB Volvo has already said no to an outright purchase, a partial purchase or other partnership.

        Supposedly, buried deep in the bowels of the original purchase agreement between Ford and Volvo is a first right of purchase by current management. I expect that to be the end game for this. Current management, the Swedish government (through tax incentives and breaks) and a Swedish investor will eventually own Volvo.

        Someone also asked about the logo. If the above comes to pass, AB Volvo has no problem with continued use of the logo. If another buyer wins out, then other arrangements will probably be made.
      • 6 Years Ago
      XC models of every line has gotten silly. That and having some models priced the same or higher than numerically superior models confused customers. Then there is that delightful 30 series that can't be properly optioned out here and has to be built and shipped reducing shopping satisfaction.

      Once a brand distinguished by safety who let sight of the ball as now everyone touts safety. What is there to set them apart from other brands? Big red tail lights?
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