SwedeSpeed - Volvo Performance Forum banner
1 - 5 of 5 Posts

·
Registered
Joined
·
1,651 Posts
Discussion Starter · #1 ·
The on-off-on-off sale sage from Ford has already disrupted Volvo's product planning and programmes and now their deliberation has frozon volvo's loan requirement/grant. This sort of thing is highly detrimental to the planning dept and further to make progress you need to be able to set in place long term plans. A very frustrating situation which I hope is resolved very very soon (as Stephen Odell has also said, it needs rapid resolution) so Volvo can settle into new plans and new long term ownership and product planning

Reuters reports

UPDATE 2-Volvo Cars says govt talks on EIB loan put on hold
Thu May 7, 2009 11:51am BST

Email |Print | Reprints
[-] Text [+] * Volvo Cars says government talks on EIB loan on hold

* Says talks hampered by strategic overview (Adds Volvo Cars, debt office comments)

By Victoria Klesty

STOCKHOLM, May 7 (Reuters) - Ford-owned (F.N: Quote, Profile, Research) Volvo Car Corporation said on Thursday talks with the Swedish government on state guarantees for loans from the European Investment Bank (EIB) [EIB.UL] had been put on hold.

"After a long period of negotiations regarding guarantees for an EIB loan, Volvo Car Corporation and the Swedish government have jointly decided to postpone the discussions on the state guarantees," the company said in a statement.

"This is due to the strategic review being carried out by Ford, which could lead to a sale of Volvo Car Corporation."

In March, EIB granted Volvo Cars a loan of 200 million euros ($266 million) to develop new environmentally friendly vehicles, provided the carmaker could secure loan guarantees from Sweden.

Last December, Sweden reserved 20 billion crowns ($2.5 billion) for such loan guarantees to aid Sweden's ailing auto industry.

"We are of course very disappointed we have not reached an agreement", Volvo Cars Chief Executive Stephen Odell said in the statement, adding Sweden's decision would mean other European carmakers, which unlike Volvo Cars have received government loan guarantees, now would have a competitive advantage. Continued...

UPDATE 2-Volvo Cars says govt talks on EIB loan put on hold
Thu May 7, 2009 11:51am BST

Email |Print | Reprints
[-] Text [+] The Swedish debt office, which has handled negotiations with Volvo Cars on the guarantees, said Volvo had declined the conditions in a proposal the office submitted in April after discussions with the government.

"As I interpret this, Volvo will come back to the government when this strategic overview and the picture regarding a potential new owner becomes clearer," said Magnus Thor, head of the national debt office's guarantee and loan department.

Maria Bohlin, spokeswoman at Volvo Cars, said the outcome was a disappointment, but that the government demanded a long-term commitment which made the matter very complex since Ford is in the process of selling the Swedish car brand.

She said the company's projects earmarked for EIB funding were still running and that there were no plans to cut jobs as a result, though the project plans would need to be changed.

"Deadlines will now be revised," Bohlin said. "So of course this affects us. But the projects are still running."

Volvo Cars will now focus on other government sponsored initiatives such as support for research and suppliers.

"In December, the government announced these rescue loans, but very few, or hardly any (suppliers), have been able to get any money. The conditions are very strict," said Bohlin. (Additional reporting by Johannes Hellstrom; Editing by Rupert Winchester) ($1 = 0.7527 euro) ($1 = 7.949 Swedish crowns)
 

·
Registered
Joined
·
2,732 Posts
Re: Ford's sale of Volvo causes more problems (Shimon)

I strongly feel that Volvo just needs to hang in until all the transactions occurring in North America play themselves out - sixty days is on the table.

Ford is being prudent in good business practice and so is the European Investment Bank - all normal as the hourglass slowly empties.

In addition I cannot see Princess Volvo selling at $2b a fire sale price if I ever heard one.
 

·
Registered
Joined
·
1,651 Posts
Discussion Starter · #3 ·
indeed, a further article I havent posted speaks from insiders in the negotiations saying the buyer could be announced in one month or max of two months. Due diligence now taking place with whoever has bid for Volvo.

Who that is though remains a bit of a mystery especially that the chinese government doesnt want chinese companies bidding against each other.

What I care about is a long term permanent owner for Volvo so long term product plans can be laid out. Big investment and commitment to expanding the Volvo brands and improving demonstration of Volvo key qualities/attributes/brand strength.

Whilst a Swedish owner consortium feels more settling, can they provide the large R&D funding needed. Can they commit long term?

With regards Chinese, the cultural differences cannot be overlooked and commitment to volvo brand needs careful assessment. In both cases, a 10% stake or more by Volvo AB would be wise for both Volvo AB and Volvocars
 

·
Registered
Joined
·
2,732 Posts
Re: (Shimon)

Most interesting.

Agreed with your observations about the Chinese as they are all intertwined into the government financial stimulus.

The only company that I can see merging with Volvo is "Ford of Europe". They have the know how to expand Volvo re: qualities/attributes/brand strength... etc. Maybe they are one of the other companies in the bag of secret potential buyers - wwwoooooo?????

As you say "What I care about is a long term permanent owner for Volvo so long term product plans can be laid out." Ford of Europe is such a company but only if the chips are really down and I mean really down. If Ford has to sell at fire sale prices then at least sell it to a family member. That's the proper thing to do.

In 60 days or sooner Ford will need to make that imporatant announcement.

"Have you driven a Ford product lately?" Let's bring this back.
 

·
Registered
Joined
·
1,651 Posts
Discussion Starter · #5 ·
Ford Europe and Ford Us operate as seperate divisions but an internal sale of Volvo to Ford Europe from Ford overall is unlikely. I dont see Ford divesting this way especially given the new "one Ford" product strategy.

It would be possible if Ford was planning to spin off Ford Europe as per GM looking at separating Opel/Vauxhall but as above Ford dont seem to be set on that path of divestment.
 
1 - 5 of 5 Posts
Top