Job cuts boost speculation over Volvo sale
Author: Robin Brown
Published: 03 July 2008
News that Volvo will cut eight per cent of its global workforce has led to speculation that Ford may once again investigate selling the premium brand.
After selling Aston Martin in 2007 and recently selling Jaguar Land Rover to Tata Motors for $2.3bn, Swedish manufacturer Volvo is the only remaining member of Ford's Premier Automotive Group - a suite of luxury and performance companies designed to tap into high-end, high-margin markets in the way that German companies such as BMW, Volkswagen and Mercedes had.
Problematic companies like Jaguar and low-volume Aston Martin never performed as they were expected though, and now Volvo has been hit hard by the weak dollar. The Swedes export all of their models to the US - a significant market - as they have no US-based facilities, and have seen sales freefall stateside as a result.
The rising cost of raw materials and falling sales have led Volvo to cut jobs to free up over $600m. Volvo lost $150m in the first quarter of 2008.
The news will come as another blow to parent company Ford, which is said to be once again looking at a potential sale.
Ford shareholder Kirk Kerkorian is known to back the sale, and various media reports suggest that Shanghai Automotive, Dongfeng Motor and Renault are potential buyers. BMW has been linked with a buyout previously, but ruled itself out last year.
Extricating itself from part- and platform-sharing synergies may prove more difficult than the painful divorce from Jaguar Land Rover though. Ford bought Volvo in 1998 for $6.5bn and the two companies share several platforms.
The Ford C1 compact platform is currently shared by the Ford Focus C-Max, Mazda 3, Ford Focus, Volvo S40, Volvo V50, Mazda 5, Volvo C70, Volvo C30 and Ford Kuga, while Ford's EUCD platform for midsize European vehicles was used in the Volvo S80, Ford S-MAX, Ford Galaxy, Land Rover Freelander, Ford Mondeo, Volvo V70 and Volvo XC60 compact SUV.
Analysts have previously suggested that the sale could be worth $8bn to Ford, a figure likely be somewhat lower at the moment if a sale were to go ahead.
Ford has again stated that it does not intend to sell Volvo.
The new Volvo XC60 crossover SUV is the safest and most stylish car the Swedish company has made, says Volvo.
Ford has announced the sale of Jaguar and Land Rover to India's Tata Motors, confirming one of the worst-kept secrets in automotive history.
Prices, details, pictures and reviews of all executive cars on the UK's roads.
New Volvo sub-120g/km carbon range includes C30 hatch, V50 estate and S40 saloon.
Volvo's Fredrik Arp will make way for Stephen Odell as Ford wields the knife in an attempt to reverse recent decline at the Swedish car-maker.
advertisement
Land Rover will introduce a stop-start version of the Freelander small SUV to drive down fuel consumption and emissions. | 07/10/2008
Renault has debuted the new Megane Coupe at the Paris Motor Show and will debut the model in late 2008. | 07/10/2008
Further details have emerged for the new Vauxhall Insignia Sports Tourer estate model, available from £17,185. | 07/10/2008
The Suzuki Swift Attitude gets a specification upgrade for 2009, adding air conditioning and sports seats for £9,999 on the road. | 07/10/2008
Volkswagen has announced a new entry-level specification and two additional engines for the Scirocco coupé, available to order now. | 07/10/2008
|06/10/2008
LSUK, thought to have been rescused by Euro Car Parts, has been unexpectedly closed by the new owners with the loss of over 600 jobs.
|07/10/2008
Euro Car Parts has put out a statement on the closure of LSUK, stating that a closure of the business was unavoidable due to a 'lack of support'.
|06/10/2008
An A-Z guide to all the manufacturer and new models at the Paris Motor Show in 2008.
|06/10/2008
Alfa Romeo MiTo, Citroën C5, Ford Fiesta, Opel/Vauxhall Insignia, Renault Mégane, Skoda Superb and Volkswagen Golf are European Car of the Year 2009 nominees.
|06/10/2008
The 21.2% year-on-year sales slump is terrible news for the car industry, but could be good news for car buyer.
|20/11/2007
Around 400 people a day risk damaging their car by misfuelling, and filling up with gas is a mistake that could cost thousands. So what do you do if you´ve filled up your diesel car with unleaded petrol?
|01/10/2008
Euro Car Parts has acquired Pinco 1555 Ltd, including all 53 of LSUK's 53 branches, together with subsidiaries M I Diesel Products, Protech Automotive (UK) and Yeovil Rewind.
|06/12/2007
Fuel protests similar to those that brought the UK to a halt in 2000 are being planned by a breakaway group of disaffected hauliers, according to press reports.
|06/10/2008
LSUK, thought to have been rescused by Euro Car Parts, has been unexpectedly closed by the new owners with the loss of over 600 jobs.
|16/03/2008
A list of the new road tax bands as described in the 2008 budget. Cars are placed in VED (Vehicle Excise Duty) bands acording to the amount of carbon dioxide emitted by the vehicle.
Search Motortorque:
No readers comments
Be the first to write a comment on this article