Don't expect Volvo to join Jaguar and Land Rover on the auction block anytime soon.
Speaking at the manufacturing launch of the 2008 Ford Taurus last week at the Chicago Assembly Plant, top Ford executives suggested Volvo, which Ford purchased in 1999 for about $6.5 billion, has become too integral to Ford's ongoing engineering and marketing strategy to be carved out of the company for cash.
“Volvo is pretty integrated into Ford right now,” Mark Fields, Ford's president of the Americas, told the Free Press. Fields, who is heading up Ford's crucial North American turnaround plan, previously led Ford's Premier Automotive Group, which oversees Jaguar, Land Rover and Volvo.
After selling the ultra-luxury Aston Martin brand for $848 million in May, Ford is now exploring selling other pieces of PAG to raise more money to support its turnaround plan. That so-called Way Forward plan aims to shed 16 plants, eliminate 44,000 jobs and revamp the company’s Ford, Mercury and Lincoln lineups in hopes of restoring the company to profitability in 2009.
Ford CEO Alan Mulally told the Free Press in Chicago that a review of the place Jaguar and Land Rover will play in Ford's portfolio and future will be completed soon. Analysts say those brands, whose dealer and manufacturing operations are entwined, could fetch as much as $8 billion in a sale, according to Citigroup.
“Any good business continually reviews its portfolio,” Mulally said.
But Fields said Ford has worked diligently to merge Volvo's operations with Ford's over the past five or so years, especially as the Dearborn automaker tries to remake its image as a safety leader. Most of that integration has been apparent in Ford's European lineup so far, but now the North American division is beginning to enjoy the fruits of the relationship.
Volvo, for example, was instrumental in helping Ford engineers make the new Taurus safer, developing crush zones that transfer energy around the passenger compartment in a crash, protecting occupants. The Taurus has now earned a “Top Safety Pick” from the Insurance Institute for Highway Safety. To qualify, a vehicle must earn the highest rating in front, side and rear impact tests and also be equipped with standard electronic stability control.
Fields, who was the architect of the PAG turnaround that has yet to see Jaguar become profitable, did not want to discuss his personal feelings on the possible divestiture of the brand.
“At the end of the day, you have to do what is right for the business,” he said.
