Ford cutting production at Volvo, possibly seeking buyer

Posted Tue May 20 2008 7:22 AM by Viknesh Vijayenthiran

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).

Reader Comments

Tue May 20 2008 8:58 AM
Paul says

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.
Tue May 20 2008 9:04 AM
Paul says

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!
Tue May 20 2008 11:12 AM
Randy says

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
Tue May 20 2008 11:25 AM
Bender says

I really hope Volvo lands at someone better than Ford. BMW would be ideal, I think...
Tue May 20 2008 2:47 PM
chris says

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.
Wed May 21 2008 12:32 AM
simple says

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.
Fri Jul 4 2008 8:33 AM
CK says

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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