Re: Sweden prepared to guarantee loan for Volvo ......Nothing For SAAB (philisophe)

Fantastic News.

I had a gut feeling it would go this way.
Makes me happy.

PS: philisophe you made a major phopow you copied the Automotive News article in it's entirety. Be prepared to be harassed from Munin and RearWheelPaul with ugly pics and unsavoury comments.

Edit: The cut and paste had bold highlights cross-referenced by follow-up comment. Not good enough it seems.
New SS members should become aware that they can experience harassment from seasoned members. I suggest that SS set-up a protocol as a "rule of thumb" for new members to note and follow.

Modified by stev vanveit at 3:07 PM 2-24-2009

 

Re: Sweden prepared to guarantee loan for Volvo ......Nothing For SAAB (stev vanveit)

Quote, originally posted by stev vanveit »

PS: philisophe you made a major phopow you copied the Automotive News article in it's entirety. Be prepared to be harassed from Munin and RearWheelPaul with ugly pics and unsavoury comments.

There's no reason to get upset until philosophe starts to mimic an RSS feed. By my count, he has at least 30 news articles to post in the next three days to equal Stev's record of cut-and-paste news articles.

Now to the topic at hand...

Quote, originally posted by Automotive News »

The government would guarantee 90 per cent of a 5-billion-kronor (573 million dollars) loan, Hagglund said. The remaining 10 percent would be secured from other sources.

Quote, originally posted by Automotive News »

OK, so the loan is for $650M and change... Volvo suffered a disastrous 2008 with a pre-tax loss of $1.46 billion. The brand's global sales in 2008 were 359,000 units, down from 482,000 in 2007.

... this equates to roughly 6 months operations and maintenance money at Volvo's current burn-rate.

Quote, originally posted by Automotive News »

Unlike GM, Ford has clearly stated they will take full ownership responsibility and guarantee capital flows to Volvo Cars until they have found a new owner for Volvo Cars," Hagglund was quoted as saying.

The only thing that Ford has to do in order for Volvo to secure the loan is "to maintain normal levels of capital (i.e. not force Volvo into Chapter 7)".

This appears to be some shrewd work on Ford's part. By doing essentially nothing, they secure a loan which helps Volvo to continue to operate . This helps the company appear more functional while it is being shopped around.

When Ford sells Volvo, it commitment ends. They get whatever they can through the sale. Volvo's loan goes with whoever buys it.

But, at the end of the day, Volvo is still on the hook for ~$650M.

Quote, originally posted by stev vanveit »

Fantastic News.

It is from this perspective that one MUST ask, Stev, what's so fantastic?

Is it that Volvo will remain under Ford? Nope. Ford still intends to sell.

Is it that Volvo has the funds to develop new products? Nope. ~$650M won't last long at Volvo's current rates of expenditure.

Is it that Volvo has "found" $573M? Nope. It's simply a loan... and one that requires another source to fully secure (the other 10%).

If you think about it, Stev, this is nothing but a bit of corporate "smoke and mirrors" intended to achieve little else other than keep Volvo out of receivership until Ford can unload it.

After that, it's anybody's game...

So I must, therefore, ask you to tell me why this is "fantastic news"?

 

nope... volvo is currently being valued/marketed at 2 to 3 billion

ford is still funding volvo at the moment, funding R&D and new model programmes.

sure, they are looking for buyers but they are also looking into the possibiliy of keeping volvo. so work continues at volvo.....

 

Posts Response to Same

I certainly do not want to Anger the Gods

We try to "cut and paste" to be certain the information is current
and correct ..as well as provide credit to the originating sources..

I'm sure we can do much better...

Its pure hell being a nube

 

Re: Sweden prepared to guarantee loan for Volvo ......Nothing For SAAB (stev vanveit)

Quote, originally posted by stev vanveit »

PS: philisophe you made a major phopow you copied the Automotive News article in it's entirety. Be prepared to be harassed from Munin and RearWheelPaul with ugly pics and unsavoury comments.

Please keep your ad hominem attacks to OTF.

 

Re: Sweden prepared to guarantee loan for Volvo ......Nothing For SAAB (Munin)

Quote, originally posted by Munin »

Please keep your ad hominem attacks to OTF.

Exactly, you two should look in the mirror. Yes it could of been handled a lot better - your the veterans with all the know how. How do you think I feel. You posted right in News and Rumors for all to to see and many other's are now taking shots at me for no apparent reason other than following your leads. The virus is spreading. You give me no choice but to defend myself and reboot.

I respect everyone, nothing against you or whomever.

I like cars. I like Volvo. I like Ford. If I had a wish I would wish that Ford and Volvo to survive this downturn as together they make a dynamic team.

 

Re: Sweden prepared to guarantee loan for Volvo ......Nothing For SAAB (stev vanveit)

This came through one of our subscription accounts..this AM..

Thought this may be of interest..it appears the whole Volvo..Ford
issue may be resolved...

Three interested parties may place indicative bids for Ford Motor Co's struggling Swedish Volvo Cars unit in April, Swedish business daily Dagens Industri reported on Tuesday.

The paper, citing undisclosed sources, said the interested parties were Chinese carmakers Dongfeng Motor Group and Chongqing Changan Automobile Co, and "a European constellation."

"Indicative bids are to be expected around the Easter weekend," the paper quoted a source as saying.

The paper said the European Investment Bank (EIB) was expected to grant Volvo a 5 billion Swedish kronor ($568 million) loan in the near future.

Volvo applied for the loan last month. The Swedish government has tasked Sweden's debt office with negotiating an agreement with the EIB which would enable the government to guarantee the loans.

Ford bought Volvo for 50 billion kronor ($6.45bn) in 1999 following a bidding war with Volkswagen and Fiat.

The brand was profitable at first, but, more recently, it has been in the red.

Volvo, which is based in Gothenburg, Sweden, cut 6,000 jobs last year as part of its efforts to reduce costs.

 

"a European constellation" is an interesting phrase. Maybe a mistranslation from the Dagens Industi article?

Changan Vs Dongfeng. Dongfeng seem to be in bed with many manufacturers but dont seem to have much of a self engineering ability. Dont make their own models so Id be worried about volvo preserving its individuality in such a company, risk of being swallowed up into the Dongfeng corporation CVS....

Changan - close to Ford. A logical sale for Ford as they partner them in China, supply engines, g/boxes. They make volvos for volvo in china too.

Changan hasnt been embroiled in IP controversy. Make their own engines too. Interesting. Clean boundary between the mainstream budget Changan brand and the Volvo premium. Changan isnt the biggest brand in china meaning there is a risk of takeover by another chinese group. Changan seem ambitious to grow and also have a V8 powered coupe concept in the wings. Interesting project for volvo.

No mention of the Chery-Quantum Chinese-Israeli bidders. Chery-Quantum is recruiting experienced managers and engineers/designers at the moment for this "new from the ground up" car company. Initially planning two luxury cars for china and export. In many ways, an "empty company" with money, management, plans but no car company infrastructure. Volvo fits that void nicely. An interesting mix of chinese, American and Israeli owners. risk with investment companies is they are a long term investor. By Chery's 55% means risk is low as Chery could buy out Quantum if needed.

Geely arent mentioned nor the small stake in volvo cars volvo AB mentioned they were interested in......

also, a swedish investment group is also interested in volvo.

overall, volvo needs a long term solution to ownership and committment!