Ford Keeps Volvo. For Now.

Robert Farago
by Robert Farago

Speaking to [financial] analysts at Ford's conference call for Q3's financial results, Ford CEO Alan Mulally announced that the Blue Oval Boyz are going to hang onto their Swedish captive import for a while longer. "Our plan now is to not sell it and to focus on improving, especially, the cost structure and the position of the brand itself reflecting their new terrific lineup of cars and trucks." Wow! Alan calls SUVs trucks now! How car guy is that? Anyway, about that brand positioning… "They are really moving to a more premium brand, improving cost structure." So, no word for Volvo's brand postition other than "premium." You know, like safe. Or safe! At least Volvo's safe from Ford's axe for the time being. But are they safe from the prospect of losing money? "They're going to be fine," Mulally told the automotive egg-heads. "I think." He thinks? He THINKS? Will someone buy this guy a copy of The Little Engine that Could? Oh, and the AP reports that Mulally left the door open to the possibility of kicking Volvo out. "Ford will continue to review the brand periodically." How reassuring.

Robert Farago
Robert Farago

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4 of 33 comments
  • Pch101 Pch101 on Nov 08, 2007
    How on earth can you “improve cost structure” on a premium, low(ish) volume model range? Parts and platform sharing. Unfortunately, it's all too tempting for the domestics to run with that ball too far by diving into the evil abyss of badge engineering.
  • Jthorner Jthorner on Nov 09, 2007

    "Given their limited time and resources, Ford has bigger fish to fry. And this is the only asset they can quickly exchange for some serious green." Under current conditions Ford can't get much cash for Volvo because it is viewed as a fire sale situation, and nobody is lining up to buy automakers today, unlike in 1999 when there were bidding wars going on for the likes of Volvo, Rolls-Royce, Jaguar and Land Rover. Volvo has a well established business with plenty of capable people top to bottom. Unlike Jaguar, it was a growing and profitable company when Ford bought it. Ford top management really doesn't need to spend much time thinking about Volvo issues and can go about fixing the mainline business. The one massive business issue Volvo faces right now is that the US remains it's biggest market and the dollar is very weak right now. Volvo builds all of it's products in Europe where the currency valuations visa-vis the dollar have to be putting a world of hurt on them.

  • Michael Karesh Michael Karesh on Nov 09, 2007

    The "strategic plan" talks about making Volvo more independent and releasing separate financial results for it. Sounds like they're simply forgoing a sale today to get a higher price tomorrow.

  • Geeber Geeber on Nov 09, 2007
    KixStart: And it’s also OK if Mullally isn’t a passionate car guy if he has the right people bringing him designs and doesn’t screw around micro-managing things. If the ideas and plans bubble up and Mullally green-lights the right ones, then he’s doing a very good job as CEO. Bingo! We have a winner! What Ford needs is a CEO who can properly bring to fruition good ideas, and get out of the way when necessary. It also needs a CEO who can reform a dysfunctional corporate culture riddled with executives more focused on protecting their fiefdoms than producing great cars and trucks. Mullaly received a big boost when Ford's board reduced the power of the Finance Committee to veto new products or product upgrades. Is Mullaly the right person for the job? Don't know for sure yet, but so far I like what I see...