Will Ford Sell Volvo? Not Unless It Really Has To

(MoneyWatch)  Do restructuring and layoffs at Volvo Car Corp. mean Ford is less likely to sell Volvo, or more? My opinion -- today, at least -- is "less."

Ford CEO Alan Mulally says the plan is to keep Volvo and "fix" it, rather than sell it. Volvo's recent cutbacks sure look like a company that's getting "fixed," as painful as it may be. In addition, cutting jobs in Sweden is no picnic, even if Swedish socialism isn't what it used to be. Nobody wants to cut jobs there lightly, if the short-term plan is to sell the company.

Meanwhile, when he was named president and CEO of Volvo on Sept. 2, Stephen Odell said Volvo would take "a more stand-alone approach within Ford Motor Co."

That struck me as contrary to the very strong trend in the auto industry to save money by buying in bulk, by sharing product platforms, engines, transmissions, electronics and other parts under the skin. That statement also struck me as a reference to the fact that a "stand-alone" Volvo would be easier to sell.

However, Doug Speck, president of Volvo Cars of North America, said in a phone interview on Oct. 8 that by more independence, Volvo means operational independence ?€" decision-making independence ?€" and that Ford is not cutting Volvo out of its plans to share products across world markets.

Separately, Ford has said it will introduce six European small vehicles in North America by 2012. The only ones confirmed so far are the Ford Focus and the Ford Fiesta. Even though Ford bought Volvo back in 1999, direct sharing between Ford and Volvo has been minimal compared with, say, General Motors, which is sharing products and platforms in various combinations among the Cadillac, Chevrolet, Saab, Opel, Pontiac, Vauxhall, Saturn, and Holden brands.

"The reality is, we'll be more apt to share platforms and powertrains than we have in the past," Speck said. "Autonomy does not mean we will go our own route with product."

Another way of looking at it is that Mulally wants his staff in Dearborn concentrating on the Ford brand, and not on Volvo.

"More and more, the Ford folks are supposed to wake up in the morning and say, 'How do I succeed in the Ford business?' -- And let the Volvo guys run Volvo," Speck said.

That makes sense, even if Ford is ultimately forced to sell Volvo. That's still a distinct possibility, but it sounds like Ford would like to avoid selling Volvo unless it has to, to cut costs and raise cash.