Ford CEO Allan Mulally has announced that he is looking at options to sell off the Volvo brand in order for the company to focus more on its core business. It makes sense because right now the last thing Ford needs is a distraction and Volvo hasn’t exactly been a money-maker for the blue oval. Ford has had to keep a constant eye on the company just to keep it out of the black here in the states where recent Volvo sales have been flaccid at best.
Ford aquired Volvo in 1999 for a total sum of $6.45 billion. It was one of a few brands that made up Ford’s now-defunct "Premier Group" of brands. These included recently sold Jaguar, Land Rover and Aston Martin. The company has been downsizing ever since the beggining of last year in an effort to streamline operations and boost the strength of the company’s balance sheet.
"Given the unprecedented external challenges facing Ford and the entire industry, it is prudent for Ford to evaluate options for Volvo," Ford CEO Alan Mulally said. But Mulally has made it clear that he’d like to keep Volvo if they can turn up the profitability switch, saying, "Volvo is a strong global brand with a proud heritage of safety and environmental responsibility and has launched an aggressive plan to right-size its operations and improve its financial results."
Whether or not all that safety and heritage will translate to a profitable business remains to be seen. While not a cause for concern for Ford, Volvo nonetheless needs to go somewhere. Hopefully, with the line cast into the water, Ford can see if it gets a few bites on the way to evaluating the worth of its famous Scandanavian brand.
Source: Automotive News