Tough times have hit Ford hard with the US car maker in serious need of cold hard cash. This has led the Blue Oval to consider the sale of Volvo with the final decision expected to take several more months.
Ford has owned the Swedish manufacturer since 1999 after it paid an enormous $6.45 billion. Currently Volvo isn't doing all that well, in the first nine months of this year it posted an operating loss of $US729 million, compared with a loss of $US164 million for the same period in 2007.
The sale of Volvo would mean Ford would have very few brands under its wings. The company offloaded luxury Jaguar and Land Rover brands to India's Tata Motors Ltd earlier this year following the sale of its stock in Aston Martin while it has also agreed to sell about two-thirds of its 33.4 percent stake in Japanese automaker Mazda Motor Corp for around $538 million.
"Volvo is a strong global brand with a proud heritage of safety and environmental responsibility and has launched an aggressive plan to right-size its operations and improve its financial results, (but) given the unprecedented external challenges facing Ford and the entire industry, it is prudent for Ford to evaluate options for Volvo," Ford CEO Alan Mulally said in a statement.
However Ford says it will not sell Volvo as a measure of desperation. The company will consider a partial sale or joint venture or if the right buyer doesn't appear in this tight credit market, Ford could keep Volvo and aim for better results from a leaner operation.
Ford began a restructuring for Volvo in November 2007, part of which includes eliminating about 6000 jobs.
What does the future hold for Volvo?