DETROIT - Ford Motor Company made it official Monday morning, December 1. That's the day before it joins General Motors and Chrysler LLC back on Capitol Hill with plans for becoming better car companies, and showing they deserve $25 billion worth of federal loan guarantees.
We all know by now that Ford needs a share of the $25 billion the least because it has moved farther along in its downsizing. And because it has hocked everything up to its Blue Oval corporate logo for a line of credit to help see it through to 2010 and the United Auto Workers' Voluntary Employee Benefit Association. Still, it won't turn down a portion of the cash. So you shouldn't be surprised that the automaker that has proved it could quickly, and cleanly shed itself of money pits Aston Martin, Jaguar and Land Rover, and get rid of its controlling interest in Mazda in quick order is now willing to sell off Volvo.
Problem for Ford and Volvo is, who will buy it? When it sold approximately 20-percent of its 34 percent of Mazda before Thanksgiving, Mazda shareholders and other Japanese companies bought up the stock from Ford.
Ford is in the same position with Volvo that GM is with its Hummer division. Volvo's sales in the U.S. this year have been nearly as dismal as Hummer's. And it's not doing that much better in Europe. Now that Ford has made the most of sharing the Volvo's S60/S80 platform with cars like the Taurus, Flex and Lincoln MKS, Ford is ready to return to simple, streamlined roots, concentrating on Ford, Lincoln and Mercury. That last brand will be essentially a collection of trim bits and grilles on Ford models, designed to keep Lincoln dealers happy with high-volume, low-priced models. No matter what you think of Mercury's future, its cars are cheap to build and necessary in keeping Lincoln from going further downmarket.
So this is the best possible time for Ford to sell Volvo. It's also the worst, in that it won't find the kind of buyer it needs: a full-volume automaker that can build Volvos with shared parts from its low-priced lines. Rumors that BMW was interested a few years ago were nothing more than rumors; it doesn't build low-priced cars, and after nine years owning Rover almost brought BMW down, it doesn't need another semi-premium front-wheel-drive brand.
Both Renault and Fiat could attract buyers with Volvo who wouldn't consider Renaults or Fiats, but Fiat already has its hands full trying to reverse the decline it brought on for the reputation of its Lancia brand. Renault/Nissan's Carlos Ghosn already has dismissed the idea of buying or merging with other automakers in the current economy.
Ford's intentions, then, can't be much more than that. It's a signal to Congress that it's willing to do something in addition to the considerable progress it's already made in downsizing. The good news is that if it does find a buyer for Volvo in 2009, you can take that as a signal that the global economy has finally bottomed out.