Ford Will Keep Volvo

[igor]

buried in the Q3 financial report:

In addition, the company has been conducting a strategic review of Volvo, and has developed a plan. The first priority of the plan is to improve financial performance at Volvo. The plan also includes: enhancing Volvo's position as a global producer of premium vehicles; establishing appropriate business arrangements between Volvo and Ford-brand operations to allow Volvo to operate on a more stand-alone basis in the absence of the PAG structure; and, continuing to achieve synergies between Ford-brand operations and Volvo in areas such as product development and purchasing. The company plans to disclose Volvo's financial performance beginning with 2008 results.

http://media.ford.com/article_displa...ticle_id=27148

Igor

[nadepalma]

There is a further report here: http://www.iht.com/articles/ap/2007/...Ford-Volvo.php

Ford Motor Co. said Thursday it will not sell its Volvo unit for now and instead will focus on improving the brand's financial performance.

"Our plan now is to not sell it and to focus on improving, especially, the cost structure and the position of the brand itself reflecting their new terrific lineup of cars and trucks," Ford President and Chief Executive Alan Mulally said during a conference call with Wall Street analysts and reporters to discuss Ford's third-quarter financial results.

Mulally said Ford will continue to review the brand periodically.

Ford also will disclose Volvo's financial performance starting next year. Volvo's earnings now are combined with results from Jaguar and Land Rover as part of Ford's Premier Automotive Group, but Ford is planning to sell Jaguar and Land Rover early next year.

Ford lost more than $12 billion in 2006 and has been struggling to cut costs and return to profitability. When it announced it was planning to sell its luxury Aston Martin brand in August 2006, it said the sale of Volvo was possible. In July, Mulally confirmed that Ford was conducting a strategic review of Volvo and likely would make a decision by the end of this year.

[Perian]

Source: Special Automotive News Email Alert

DETROIT -- Ford Motor Co. is holding on to its Volvo brand -- at least for now.

In its third-quarter earnings report issued today, Ford said it has developed a strategic plan for Volvo. The statement did not indicate the long-term outlook for Volvo as part of Ford, but the unit will remain a Ford unit for now.

“Our plan now is not to sell Volvo but to improve its cost structure and brand positioning. I think we can do substantially better than where we are today,” said Ford CEO Alan Mulally in a conference call announcing the company’s third quarter results for 2007.

Mulally however refused to rule out a future sale, saying Ford would “continue to review its brand portfolio.”

Ford wants Volvo to operate more independently and achieve greater efficiency by cooperating on product development and purchasing.

“This suggests Ford is not going to change anything immediately, but is keeping its options open longer-term,” wrote Jonathan Steinmetz, head of automotive research at Morgan Stanley in New York.

Ford said that Volvo made an undisclosed loss in the third quarter of 2007, although sources familiar with the company said it was “more than $100 million.”

The strong Swedish krona makes it more expensive to sell Swedish-built Volvo cars in the US. Despite that, there are no plans to build an assembly plant there. "The payback on a North American plant is pretty long,” Volvo CEO Frederik Arp told Automotive News Europe in July.

Volvo, along with Jaguar and Land Rover, forms part of the Premier Automotive Group (PAG), a Ford subsidiary set up in 1999 to oversee the US automaker’s premium brand operations.

Ford said the first priority of the strategic plan is to improve Volvo’s financial performance. Volvo lost money in the third quarter, Ford said.

"The most important thing we can do in the near-term is improve the cost structure, so that's what we're going to focus on," Mulally said.

[Perian]

Good news.

Volvo and its products have been a very beneficial influence on Ford Motor products.

I would assume they will continue to be.

If only the $USD would improve.

[mgescuro]

If they can continue to make Volvo stand out from the rest of the FoMoCo lineup and create a strong brand identity for Volvo, I forsee great things for Volvo.
If Ford decides to start slamming Volvo with obvious parts bin items and Volvo begins to lose its unique interior and becomes a premium Taurus... it's death.

I just wish GM had that sort of vision for Saab.

[nadepalma]

Originally Posted by Ford Media & Igor

The plan also includes: enhancing Volvo's position as a global producer of premium vehicles; establishing appropriate business arrangements between Volvo and Ford-brand operations to allow Volvo to operate on a more stand-alone basis in the absence of the PAG structure; and, continuing to achieve synergies between Ford-brand operations and Volvo in areas such as product development and purchasing. The company plans to disclose Volvo's financial performance beginning with 2008 results.

It also sounds to me that while they want to improve the business and keep things growth mode, they're also prepping the company for an "eventual" sale. I say this because they are going to make financial performnce public and look for them to operate more on their own.

If anything, Volvo got the least from PAG. The only real synergy between them and the rest of the PAG brands was the use of the C1+ platform that was shared with Land Rover for the LR2/Freelander 2 and other PAG brands starting to use Volvo sourced I6 engines. That's basically it.

[igor]

it might not be a prep for eventual sale as much as positioning it as a Mazda-type unit.

I do not know, however, how making it more independent, yet more integrated into Ford PD will work together ..

Igor

[Greg Burr]

Volvo is a great resource for engineering and safety. Judging from the current and future products introductions it looks as is the have had autonomy lately, and it is paying off.

I remember a radio news flash in July that the Financial Times said that Ford had sold Volvo and that details were to be announced in the following weeks. From the verbage about financial performance and making Volvo standalone, it looks as if the sale option is still on the table, or maybe they can't find a suitable buyer.

With Ford it's not over until it's over. Maybe they have to seriously explore all options to satisfy the creditors.

[genjy]

Volvo is perfect with FoMoCo. Sharing parts and engineering with Mazda and Ford help keep the cost down and bring freshness to the brand.

[escapen]

Originally Posted by mgescuro

If they can continue to make Volvo stand out from the rest of the FoMoCo lineup and create a strong brand identity for Volvo, I forsee great things for Volvo.
If Ford decides to start slamming Volvo with obvious parts bin items and Volvo begins to lose its unique interior and becomes a premium Taurus... it's death.

I just wish GM had that sort of vision for Saab.

This is such great news Igor! and remember Ford will never make Volvo use thier parts in the cars, only volvo parts go into fords so its really much better for safety and a quality build. GM has royally F'd up Saab

[Ach]

Originally Posted by mgescuro

If they can continue to make Volvo stand out from the rest of the FoMoCo lineup and create a strong brand identity for Volvo, I forsee great things for Volvo.
If Ford decides to start slamming Volvo with obvious parts bin items and Volvo begins to lose its unique interior and becomes a premium Taurus... it's death.

I just wish GM had that sort of vision for Saab.

It hasn't happened yet, and there isn't much reason to think it will start under Mulally.

[genjy]

Originally Posted by escapen

This is such great news Igor! and remember Ford will never make Volvo use thier parts in the cars, only volvo parts go into fords so its really much better for safety and a quality build. GM has royally F'd up Saab

Volvo cars do use Ford parts... just the parts you normally don't see (or care).

When I work under my car, I see a lot of parts with the FoMoCo stamp on them.

With that said, a lot of Volvo parts are high-quality stuff. My car's plastic rear reflectors were made in Italy and the oil filter was made in Germany.

[mbukukanyau]

Originally Posted by genjy

Volvo cars do use Ford parts... just the parts you normally don't see (or care).

When I work under my car, I see a lot of parts with the FoMoCo stamp on them.

With that said, a lot of Volvo parts are high-quality stuff. My car's plastic rear reflectors were made in Italy and the oil filter was made in Germany.

Man, what flawed logic. A reflector made in Italy is obviously better than an American made one. You know why? Its made in EXOTIC Italy...

[paul8488]

Can't find a better place to post this... drove my bosses V50 wagon yesterday. Diesel with a Manumatic. Great car... I really liked driving it. However, if Saturn is going to get ripped for poor alignment of the Aura door trim to the dash, Volvo gets a severe spanking. Some might say they're smart, as they've designed it on purpose so that there's no continuity between the dash and doors (and therefore no possible misalignment), but it really looks a bit bizarre... like the dash wasn't designed for the rest of the interior. Great car, but a cop-out in the internior alignment department.

[paul8488]

Oh, but good news! I don't pay all that much attention to Volvo, but I like what they have... I hope Saab can offer such a well-rounded and likeable lineup someday.