Nothing is Sacred, or Safe; Not Even Volvo

Published reports have buyers in China expressing an interest in taking Sweden’s Volvo Car Corp. off Ford’s hands.

Ford CEO Alan Mulally has said a couple of times now since last November that unlike Aston Martin, Jaguar and Land Rover, which Ford has already unloaded, Ford isn’t interested in selling Volvo Cars. Volvo Cars should not be confused with Volvo AB the heavy truck maker, which remained independent when Ford bought Volvo in 1999.

However, industry analysts automatically add a silent, “… at this time,” whenever Mulally says Ford wants to keep Volvo and “fix it” instead of selling it. Fixing Volvo involves cutting costs, and to that end, Volvo announced today it is cutting 2,000 mostly white-collar jobs.

Volvo has a lot going for it, not least the ultimate brand-image “high ground” of a terrific reputation for safety. However, Volvo is betwixt and between. It’s too small to be independent. It’s not well-enough integrated into the parent company’s global operations to save lots of money. And unless it’s executed right, integrating Volvo even further into the Ford orbit means Volvo loses that much more distinctiveness. Which is what Ford bought Volvo for in the first place.

The same arguments can be made, only more so, with regard to Saab and General Motors, since GM has controlled Saab even longer, since 1989, without much to show for it. No telling how many billions have gone into “fixing” Saab, which nevertheless keeps losing more and more of its oddball appeal. It shares platforms with Opel (so does Saturn).

Saab and Volvo are a nice seasoning in the automotive mix. But with GM and Ford starving for sustained profits, for how long now? You begin to wonder how long the silent, “at this time,” stays silent, and when the invisible “For Sale” sign becomes visible.