Ford to Send Volvo to the Chinese?
By Brendan Moore
The new one, courtesy of Dagens Industri, is that Ford is actively discussing the sale of Volvo to SAIC, the Chinese car manufacturer, at this very moment. Add it to the one that had a Russian investment group owned by one of the many new Russian billionaires buying Volvo from Ford this summer, or, BMW (on their second try) buying Volvo this year so that they can have a fourth brand.
The reasons that all of these sale rumors keep surfacing is that Ford’s financial position is growing more precarious by the day, Volvo profits keep dropping, and finally, Ford’s new activist shareholder, Kirk Kerkorian, thinks it would be a good idea if Ford parked Volvo in someone else’s garage as soon as possible.
Ford keeps saying that Volvo is definitely not for sale, but the doubters retort that given the circumstances, Volvo must surely be for sale, and the Ford’s denials are just part of the process to drive up the selling price as much as possible.
Meanwhile, back at the ranch, Volvo announced today that it cut 2000 employees from their payroll as a result of the financial losses they have suffered this year, as well as a gloomy financial outlook for the rest of 2008. Volvo is not getting hammered so much by declines in unit sales as they are by the milquetoast dollar valuation and the rising costs of materials. Volvo is probably losing money on a couple of models at this point as result of those market forces that are completely and utterly beyond their control.
Wouldn’t it be odd if Hummer and Volvo went to the Chinese in the next few months? Or for that matter, to the Russians?
It’s a world turned upside-down.
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