The sale of Jaguar and Land Rover to Tata is now complete, so that leaves Ford with just one remaining member company from the former Premier Automotive Group.
Swedish brand Volvo was acquired by Ford in 1999 and Dearborn has refuted that there are any plans to sell the iconic marque, but the rumours won't die.
The latest one to surface comes from Swedish business publication, Dagens Industri, via respected American journal, Automotive News. According to the report in Automotive News, Ford is contemplating the sale of Volvo to the Shanghai Automotive Industry Corporation.
The Chinese company already owns Korean brand Ssangyong and Roewe (the remains of the old MG Rover concern), so SAIC is certainly in an expansion phase. Another rumour circulating relates to a mysterious Russian investor believed to be ready and willing to relieve Ford of the Volvo division.
Although Ford's management at the highest level has roundly denied that Volvo is up for sale, Automotive News reports that outspoken Ford shareholder, Kirk Kerkorian would be happy for Ford to drop Volvo, since sales in the US market have declined drastically and the parent company is in no position to prop up the luxury/prestige brand.
Kerkorian owns a 6.49 per cent holding in Ford and is probably best known in Australia for his forthright remarks and subsequent legal action to recover lost revenue from the largely unlamented marriage of convenience (unlamented in America at least) between Daimler-Benz and Chrysler-Jeep -- DaimlerChrysler, recently dissolved.
The problem for Volvo is that the exchange rate slump has priced the company's cars out of contention. According to Automotive News, Volvo was aiming for sales of 200,000 units per year by 2010, but will be struggling to stay above 90,000 units per annum.
Volvo has been viable in Europe, but is encouraging as much as 20 per cent of North American dealers to hand back the franchise. The company is also planning to reduce its workforce by 2000 jobs. A reduction of 1400 white-collar jobs and 600 blue-collar jobs will help sustain the company in the face of not only the previously mentioned currency exchange rate adversity, but also rapidly rising prices for raw materials (more here).
Volvo has reported a first-quarter loss before tax of US$151 million, but hopes to improve the financial outlook by US$662 million with the staff retrenchments, which will largely centre on the company's operations in Gothenburg, on Sweden's west coast.
Ford is in survival mode currently and has seen sales of its formerly lucrative F-Series truck range drop through the floor (more here), potentially leaving it without the necessary resources to save Volvo if Volvo cannot save itself.
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