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Ford cutting production at Volvo, possibly seeking buyer

Ford cutting production at Volvo, possibly seeking buyer

Viknesh Vijayenthiran May 20th, 2008 Viknesh Vijayenthiran By Viknesh Vijayenthiran Author May 20th, 2008
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December 31st, 1969 Volvo’s sales slump of the past several months has led to a pretax loss of $151 million for the first quarter of the year, and with no sign of turnaround in sight parent company Ford plans to cut production in the hope that it will reduce costs. Latest reports claim Ford is hoping to improve Volvo’s financial state ahead of a possible sale. Executives at Ford have stated publicly that it doesn't plan a sale, however the Wall Street Journal reports that CEO Alan Mulally has told top executives he wants to eventually seek a buyer for the Volvo brand. Previously, Jerry York – a representative of one of Ford’s biggest investors, Tracinda Corp – voiced his own desire to sell Volvo and revealed that it could happen within the next 18 months. The production cut could potentially affect one-third of Volvo’s staff at two of its plants in Sweden and the news comes less than 24 hours after Volvo announced that it could lay off as many as 700 workers. The most likely plant to see a reduction is Volvo’s Torslanda plant in western Sweden, which is responsible for its larger vehicles such as the V70 (pictured).
Ford cutting production at Volvo, possibly seeking buyer

Ford cutting production at Volvo, possibly seeking buyer

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Volvo’s sales slump of the past several months has led to a pretax loss of $151 million for the first quarter of the year, and with no sign of turnaround in sight parent company Ford plans to cut production in the hope that it will reduce costs. Latest reports claim Ford is hoping to improve Volvo’s financial state ahead of a possible sale.

Executives at Ford have stated publicly that it doesn't plan a sale, however the Wall Street Journal reports that CEO Alan Mulally has told top executives he wants to eventually seek a buyer for the Volvo brand. Previously, Jerry York – a representative of one of Ford’s biggest investors, Tracinda Corp – voiced his own desire to sell Volvo and revealed that it could happen within the next 18 months.

The production cut could potentially affect one-third of Volvo’s staff at two of its plants in Sweden and the news comes less than 24 hours after Volvo announced that it could lay off as many as 700 workers. The most likely plant to see a reduction is Volvo’s Torslanda plant in western Sweden, which is responsible for its larger vehicles such as the V70 (pictured).

Tags: Industry

Posted in: Ford, Volvo, News


Comments (7 total)

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  1. By Paul #1, Posted: 5/20/2008

    What value would Mercury have to anybody? I keep seeing reports that Jerry York wants Ford to sell Volvo and Mercury? It makes me wonder how much they know about the auto industry. Tracinda only knows how to raise its stock - temporarily.

  2. By Paul #2, Posted: 5/20/2008

    Come to think about it. I think I'll bid on Mercury and rebadge Mustangs, along with sequential taillights, add some unique leather, and Sync. Voila! I'm in business!

  3. By Randy #3, Posted: 5/20/2008

    ford is such a joke, sell mercury who would buy it, its more like ford is going to have to pay someone to take mercury off their hands

  4. By Bender #4, Posted: 5/20/2008

    I really hope Volvo lands at someone better than Ford. BMW would be ideal, I think...

  5. By chris #5, Posted: 5/20/2008

    Bender; I think BMW is going to aim for a 4th brand that isnt quite so... overlapping.

    I don't really agree with this idea that ford would sell mercury. They might sell the name and copyright, but mercury doesnt EXIST. It would be like "Plymouth"... just a nicer trim level on Dodge. thats all. you cant sell a company like that.

  6. By simple #6, Posted: 5/21/2008

    Volvo is Ford's only 'true' luxury brand since Lincoln is no longer a valid luxury nameplate, just a ford trim level. Mercury is simply one notch above the Ford brand's top trip levels.

  7. By CK #7, Posted: 7/4/2008

    Don't count on BMW being a good prospect for takeover- they ripped the s**t out of MG/Rover not so long ago and left them for dead (once they'd got all the 4x4 technology for their X series and a new Mini out of it first).

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