At first blush, the request for Swedish aid echoes the moves of Ford and GM in Washington, D.C., but upon closer inspection, more may be at work in the desire to top up the cash reserves at Volvo and Saab. According to the Financial Times, the request for aid is being made in preparation for sale, sweetening their books to attract buyers - a position made stronger by Ford's announcement today.
“Given the unprecedented external challenges facing Ford and the entire industry, it is prudent for Ford to evaluate options for Volvo as we implement our ONE Ford plan,” said Ford President and CEO Alan Mulally. Specifically, the sale of Volvo is being considered as Stephen Odell, Volvo's CEO, works to build a stronger balance sheet and a more 'stand-alone' position for Volvo within the Premier Automotive Group (PAG).
The Swedish aid contacts were reportedly made through Volvo CEO Odell, and Jan-Ake Jonsson, managing director of Saab, to Sweden's industry minister, Maud Olofsson, and other officials. The requests are not falling on deaf ears - Sweden is considering allocating about $247 million to the two carmakers, either through direct aid or loan guarantees, with more possibilities in sight.
On the sale of Volvo, Ford says it will probably take several months to complete the review of options available, so the first decisions shouldn't be expected before late Q1 2009.