Ford "Not in Discussion" To Sell Volvo
|Topics: Volvo, Ford Motor Company
June 5, 2007
The United States’ Big Three have been experiencing the lowest points in their history as Japanese carmakers continue their rise in the United States auto market. Ford, General Motors and Chrysler have already announced and implemented workforce reduction as part of their turnaround plans. In the case of Dearborn, Michigan based Ford Motor Company, selling off a brand is seen as a short term solution to their financial woes.
Earlier this year, Ford sold the British luxury car brand Aston Martin to a consortium led by racing champion David Richards. The money generated from the sale of the prestigious brand served as a boost for the financial status of the car manufacturer.
After the sale of the famed brand, there have been speculations that Ford will be putting another British brand on the auction block - this time the Jaguar. Ford however denied that they are planning to sell the struggling luxury car brand.
More recently, it was the Swedish car manufacturer Volvo which is being speculated to be the next to go after Aston Martin. It was rumored that German car giant BMW AG requested for the full financial status of Volvo Cars from a Swiss bank who is taking care of the financial aspects of Volvo’s operation under Ford’s Premiere Auto Group.
This speculation though was recently denied by Ford with spokesman John Gardiner saying “Ford is not in discussions with BMW or any other carmaker regarding interest in the Volvo Car Corp.” The speculation surrounding the sale of Volvo became stronger when it was reported in newspapers in London and Sweden that BMW is talking with Ford concerning the sale of the safety-first oriented car manufacturer.
Another development in the auto industry which fanned the flames of speculation concerning the sale of Volvo is the fact that DaimlerChrysler recently sold its ailing American arm in the form of the Chrysler Group to Cerberus - an investment firm.
Meanwhile, FoMoCo pushes on with its restructuring plans to return the company to profitability after posting their biggest loss in their long history last year. Ford announced recently that they have closed down their Canadian engine casting plant. The closing down of the plant is in connection with Ford’s plan to eliminate engine casting as part of their business. Other manufacturing facilities like the ones building Ford body parts will be continuing their operations. The said Canadian plant produced cylinder block castings for Ford’s 4.2-liter V6 engines and crankshafts for various engines used by Ford on their different auto models. These engines are the 4.2-liter, 5.4-liter V-8, 3.0-liter V-6, 4.6 liter V-8 and the 2.3-liter engines.
The said Canadian plant employed approximately 450 persons as well as creating other jobs outside the facility’s operations. Aside from the Canadian casting plant, Ford also announced that they will be closing down another casting plant near Cleveland. The Ford Motor Company announced further that they are looking for independent auto parts manufacturers to supply them with the engine castings. This step will ensure that they can focus more on manufacturing of more important auto components such as engines and gearboxes.
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