Ford Motor Co. has decided not to sell Volvo after all

Sunday, November 11th, 2007

Not long ago Alan Mulally, Ford Motor Co. chief executive officer, told reporters that they decided not to sell Volvo. But instead of it, Ford is planning to concentrate on repairing the Swedish company’s cost base.

The future plans for Volvo is rather great, as they planning to upscale into the areas Ford which is vacating with the proposed sale of Land Rover and Jaguar.

One of the most important tasks of the company is to improve financial performance at Volvo and to enhance Volvo’s position as a global producer of premium vehicles. Establishing new business arrangements between Volvo and Ford-brand operations is also very important, such way Volvo can operate on a stand-alone basis once the Premier Automotive Group is dismantled.

Made a strategic Volvo review, Ford is planning to disclose its financial performance beginning with 2008 results.

Ford’s vehicle quality also is continuing to improve and is now getting attention. The company’s new products are also attracting new retail buyers. Ford’s sales have dropped 13 percent this year so the company’s market share has stabilized.

The new tentative agreement with the United Auto Workers, which must be ratified by employees, also will provide the company with a significant lift.

The sale of Land Rover and Jaguar will continue.

Overall, Ford reported a net loss of 19 cents per share, or $380 million, for the third quarter of 2007 and its North American automotive business remained in a deep funk with a pre-tax loss of $1 billion.

Ford’s third-quarter loss from continuing operations, excluding special items, was 1 cent per share, or $24 million, compared with a loss of 45 cents per share, or $850 million, in the same period a year ago. The company’s cash balances are now above year-end 2006 levels, despite the ongoing restructuring.

Such way, Ford decided to reduce its spending on rebates and other consumer incentives by $500 million in the third quarter.