Ford cutting production at Volvo, possibly seeking buyer

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).