What Now Ford?

A number of industry analysts and local dealers think the relationship of Ford and its Swedish Volvo unit has soured and that divorce might not be a bad thing, depending on who the new appealer turns out to be. This is what is in the auto industry although the parent company isn’t yet confirming plans to get rid of one of its subsidiaries.

Citing anonymous sources, the London Sunday Times said that Ford had decided to sell Volvo but the timing had not yet been decided. The Associated Press Sunday was told by Ford spokesman Tom Hoyt that as to his knowledge, the company is not in negotiations with anyone about the long term life of Volvo.

Gerry Meyers, a former chairman of American Motors Corp. and a professor of business at the University of Michigan at Ann Arbor, notes that it was a weak response, which obviously means that they more than likely are considering selling.

These days, Ford Motor Co. and Volvo are troubled in the United States. Both are losing market share and Ford Motor at least lost $12.7 billion last year.

Since before 2004’s peak, Volvo's U.S. sales have dropped by almost 17 percent.

Volvo had been one of Ford's most profitable brands according to Jesse Toprak, executive director for industry analysis for the automotive information company Edmunds.com. He said that Ford’s losing money now on Volvo isn’t clear. But based on some of their tracked factors, it looks like they can probably assume it is doing just fair.

Toprak says that Ford and Volvo benefited from their nine-year alliance. Ford's own vehicle quality upgraded and Volvo earned access to the research and development and other resources of one of the world's largest automakers.

Meyers said that Ford needs all the cash it can get its hands on to turn around in North America. Ford does not report separately the profits or losses of its Volvo unit.

Some local dealers think Ford didn't market Volvos well.

Mark Calisi, owner of Eagle Chevrolet and of the Eagle Auto Mall in Riverhead, which retails Volvos, Jeeps, Chryslers, Kias and Mazdas said Ford is a world-class automobile but has never told that story.

According to Tropak, Volvo is a victim of a generally weak and very competitive market. He recalls that in the ‘80s and 90’s, Volvo is the name when we mean car safety. He added that Volvo’s image always was a rather boring design but the safest car you can get.

He also left a challenge when he said that an ideal candidate to take Volvo would be another European automaker like BMW, with a clear concept on how to market European luxury cars.

Ford Motor Company has 5 divisions and one of those manufactures Mercury catalytic converter.