Aston Martin made money.

Volvo certainly MAKES money.

Unlike Saab, Volvo had a successful and clear cut transformation after it was bought by a US automaker.

If this story is true, although BMW is intrested, and will no doubt make Volvo more intresting, I can't fathom why in hades Ford would sell it.

What's next?

"Ford sells it's European and Australian Operations to finance North American Turnaround?"

Story: http://news.yahoo.com/s/nm/20070528/bs_nm/ford_volvo_dc

 

Hades.


Does seem kind of backwards to be selling Volvo as well. Why would you wanna cut the operations that make you money?

 

Ask GM why they sold many of their operations that made money, e.g. GMAC, Hughes, GM Defense, EDS.

The short answer is, profitable operations bring in a much higher sell price than non-profitable ones. Ford is projecting to burn through a ton of cash in the next few years and could very well need the proceeds from a Volvo sale just to stay afloat.

 

I hate volvo so much. Their cars SUCK.

 

I don't understand why they sell of cash flow positive assets to keep their negative cash flow ones going Sure you get the quick cash up front but now your negative profits to earnings just got bigger.

 

Good. Now hopefully GM can do the same with SAAB.

 

...

If I believed that Ford was making good money off these sales... and if I believed they had a sensible plan, and if I believed that they were going to take said money and use it to finance the necromancy their American brands so desperately need... and if I believed they could do it before the year 3000, and if I believed the American consumer would give a damn even if they managed to turnaround... I could be happy.

But those are all immense "Ifs"

 

They don't need Volvo. They've got the oh so powerful Mercury and Lincoln brands.

I'm guessing that if they sell volvo it means that they are way more fubared than they are letting on. I can't imagine that they WANT to sell Volvo. It's one of the few things they've got going for them.

 

Maybe they're trying to concentrate on their "American" brands.

I mean it's doable.

Ford should be trying to drive the Koreans out of business. Pitch Mercury against the ToyoHondaNissan. Have Lincoln cover everything up until Mercedes and BMW, which would be Jag/LR.

Of course then you've still got Mazda which not only seems to have more equity but is getting better products...

 

Volvo has brand equity... a built in buyer base... that Mercury is going to need years and some stunning product to equal. I can see Ford trying to rebuild Lincoln, but it's never going to pull the devout Volvo buyer.

As far as driving Koreans out of business, the only thing Korea has over the US is cheaper labor. They have quality that's no better than ours (and they are coming from a severe quality deficit from US makers) and their labor unions are even more powerful than the UAW is here.

Ford NEEDS Volvo. Not because the Five Hundred nee new Taurus is based on a Volvo, but Ford's Premium Auto Group had a positive effect on Ford's standing in the global automotive community. Aston Martin, Land Rover, and Volvo are brands that are making Ford money and is giving it serious credibility overseas. Jaguar is too, but it's draining money from the rest of the group.

Yet it's Jag Ford is holding on to.

I don't get it.

And what exactly makes their cars "suck"?

 

How so? What specifically sucks about their cars?

 

Volvo has an extremely loyal owner base. There are Volvo owners out there who will consider no other brand ever. Furthermore, Volvos have gotten much more attractive in recent years. It really makes no sense for Ford to sell them, however it will be a win for whomever buys Volvo.

 

I don't either. I'm simply trying to explain the unexplainable.

I suppose its possible no one is offering anythign worthwhile for Jag... but that didn't stop them from selling AM...

 

Maybe Volvo is their only brand left that isn't completely morgaged and that some will buy. They need to get cash from somewhere.

 

As discussed in another thread, they're trying to stash as much cash as possible before the UAW contract expires, because they're expecting things to get nasty.

Likewise, the timing of the Chrysler sale was no coincidence, nor is GM's recent trend of shifting liabilities out to very-long-term debt in favor of holding short-term cash.