The last time that Bill Ford has made an optimistic announcement was in 2005 wherein he cited Ford and Volvo engineers working together to produce new exciting safety features that will enhanced night vision and improved collision avoidance ability of vehicles.
Unfortunately after such announcement Ford's finances have started to dwindle and has overshadowed the earlier full of hope message of Mr. Ford. Instead of the closer cooperation between Ford and Volvo that Mr. Ford has announced, the automaker with its new CEO Alan Mulally is mulling over the sale of its Sweden-based subsidiary. Bill Ford remains to be the Chairman of Ford Motors and unlike in the past wherein he always gives out public updates on the happenings within the company now he chose to keep quite and to give as few comments as possible on the family business.
The issue on the sale of Volvo has divided Volvo and Ford. But Ford has stressed that it has not engaged in any talks with any prospective buyers. Ford with all of its assets already pledged to creditors need to raise a huge amount to continue the production of new products and to realize their turnaround plan. The sale of Volvo is one of the plausible options that the automaker has since its one of their profitable brand.
The proceeds from the Volvo sale will be used to repay all of Ford's debts and also to renegotiate borrowing terms since right now the automaker is finding it hard to find financial institutions that would loan them additional capital.
Rod Lache an analyst at Deutsche Bank has told clients last Tuesday that Ford has two very good reasons to get rid of Volvo. The first one is that the Volvo sale would simplify the recovery strategy and operating structure of Ford. Second, it would provide a source of extra cash for the restructuring of healthcare liabilities as part of the upcoming talks with the United Auto Workers' union.
However the sale of Volvo the producer of would signal the final dismemberment of Ford's premier car business outside of North America which was formed in the year 1980s and 1990s.
Ford has disposed of Aston Martin earlier this year and last Thursday was the deadline set by the automaker's financial advisers for interested buyers to give their bid for Land Rover and Jaguar. But for Volvo, Ford has not yet made any official announcement of it's supposedly sale. This must be because of the fact that the Swedish automaker has been the most profitable part of the PAG plus it has made a significant contribution to the development of other Ford products.
