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Ford Denies Volvo Sale Rumors
Autor: anthonyf :: Views: 520 ::
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The European press earlier reported that the Ford Motor Co. is eyeing the sale of Volvo Cars and the German automaker BMW is likely to become the purchaser. Denying rumors in the European press, Ford announced last Tuesday it had no plans to sell its Scandinavian luxury unit.
“Ford is not in discussion with BMW, or any other company, in regards to a possible interest in Volvo,” said John Gardiner, a Ford spokesman. Shares of Ford dropped by 0.6 percent or five cents to $8.40 at the closing bell on Tuesday.
Over the past years, rumors have persistently surrounded Ford as the company strives to recuperate and fix its operations. Since then, investors speculated about possible sales. Last week, the Financial Times reported that German luxury automaker BMW was talking to Ford about purchasing Volvo. Adding fuel to the rumors, a Swedish publication, Goteborgs Posten, announced on its website last Monday that a Ford employee had confirmed BMW's interest. Notwithstanding the reports, Ford denied takeover talks Tuesday.
Ford spokesman Tom Hoyt added that the company was not talking to anyone about selling any of its units. However, the company was still in the process of reviewing its entire portfolio, Gardiner said. "We've been doing this over the past year," he said. "We are assessing our operations globally."
In North America, Ford is focusing on four key initiatives: adjusting size to meet demand; improving product development; executing a robust financing plan to support its restructuring efforts; and molding its leadership strategy to ensure a common plan. For example, as part of its leadership initiative, the company now holds a weekly meeting that includes top management from all the key business units, Hoyt said.
Ford acquired the Swedish automaker in 1999. It forms parts of the Premier Automotive Group (PAG) of the Detroit automaker, including Jaguar and Land Rover. Ford does not reveal results for its individual brands, but taken together its luxury lineup lost $US327 million in 2006.
In March, Volvo CEO Fredrik Arp told Reuters that Ford was committed to keeping the Swedish car maker. He said Ford is “keeping its Volvo brand even as it spins off another luxury brand.” He added, "Ford is very supportive when it comes to the development of Volvo cars.” Arp said that he speaks with Ford Chief Executive Alan Mulally every week and added that Mulally had indicated his commitment to Volvo in a recent visit to the Swedish automaker's headquarters. "He visited us a few weeks ago and he was very supportive of developing the brand and developing the products going forward," Arp said of Mulally.
With the announcement from Ford, critics expect everything back to normal. BMW will not buy any other car companies, ailing or not. Volvo, on the other hand, will continue under Ford’s PAG integrating Volvo S60 parts and other auto equipment to produce state-of-the art product lines.
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