Ford Considers Selling Volvo
Ford -- probably the best-situated of Detroit's troubled Big Three automakers, not that that's saying much -- is considering selling Volvo, Ford said today.
The move could be considered a show of good faith one day before Ford, GM and Chrysler return to Congress to ask for financial help. Congress sent the Big Three home tail between legs two weeks ago, telling them to come up with a better justification for the billions in loans the automakers seek.
Ford bought Volvo in 1999 for $6.5 billion. The mulling of a sale could be Ford's way of telling Congress: See? We're trying to raise money, here. We just need some more help.
Meanwhile, the Financial Times reports today that Ford and GM have approached Sweden's government to ask for bailout help for Volvo and Saab, which GM owns. The two automakers want to pump some more money into the Swedish brands to make them more attractive to potential buyers.
Who would buy Volvo and how much would the Swedish safety-box-maker bring?
First the bad news on pricing: Auto analysts suggest Volvo would fetch only between $1 billion and $1.5 billion, which would, in technical terms, represent a major "bath" for Ford.
The deeply depressed price creates a buyer's market, which could bring a number of bidders for Volvo, which has high status appeal around the world. If Daimler can dump its remaining 18.1 percent stake in Chrysler, that might make the German luxe automaker a Volvo suitor.
December 1, 2008; 11:01 AM ET
Categories: The Ticker | Tags: Ford, automakers
Save & Share: Previous: Construction Spending, Manufacturing Data Shows Decline
Next: Gasoline Cheapest Since 2005
The comments to this entry are closed.