DETROIT — Ford Motor Co. is considering selling Volvo Car Corp. as the U.S. automaker seeks to raise cash and survive tight credit markets and a global automotive sales crisis.
Goteborg, Sweden-based Volvo Cars, which Ford bought in 1999, has been struggling with declining demand and a strong euro, which made its products more expensive. Volvo sales through October are down more than 28 percent compared with the same period in 2007, according to Autodata Corp.
Ford said Monday it expects its strategic review of the Swedish luxury automaker will take several months. The move is one of several actions Ford is taking to strengthen its balance sheet amid what it called “severe economic instability worldwide.”
“Given the unprecedented external challenges facing Ford and the entire industry, it is prudent for Ford to evaluate options for Volvo as we implement our One Ford plan,” President and Chief Executive Alan Mulally said in written statement, referring to a plan to standardize the company globally.
Ford officials would not speculate on how a potential sale would affect the companies. Spinning off Volvo into a separate entity may be a possibility, since after a prior review, Ford started taking steps last year to allow Volvo to operate on a more independent basis.
“Our relationship with Volvo during this time remains unchanged, and we will continue to work together,” said Ford spokesman Mark Truby. “What’s most important is that we make the right decision.”
The Swedish government has said it has been in talks with Volvo and with General Motors Corp.’s Saab unit following reports that the U.S. parent companies were seeking aid for their Swedish carmakers.
Stefan Lofven, chairman of the Swedish union IF Metall, said it is now extremely important that the Swedish government steps in and shows its support for Volvo in the sales process.
“Volvo is a strong brand. Now they have to find a serious owner who wants to and can develop Volvo in the future,” he said.
He said previous talks with the government about a worst-case scenario had considered temporary state ownership. He didn’t rule out that solution now.
Sweden’s deputy prime minister, Maud Olofsson, told local news agency TT that she was not surprised by Ford’s decision.
“I have seen for a long time what problems Ford has. In that situation it becomes natural for an American company to focus on the American market,” she said.
For the 2009 model year, Ford and Volvo led all brands with 16 vehicles on the Insurance Institute for Highway Safety’s list of the safest cars.
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