Swedish automobile manufacturer Volvo's passenger car division could end up being sold to a Chinese company. Volvo's current owner, U.S. motor giant Ford, is currently involved in negotiations with an interested party. The possible sell-off is heavily backed by Ford's new majority shareholder – the eccentric multibillionaire Kirk Kerkorian – whose 6% of shares give him a very loud voice indeed.
According to several media Volvo executives are expected to reveal a rationalization plan to be negotiated with the appropriate unions. The plan is expected to lead to labour cutbacks in Gothenburg, Sweden and Gent, Belgium. Last year Alan Mulally, CEO of Ford, initiated a strategic supervision of Volvo that has since been widely regarded as the initial steps of an actual sell-off. In November Mr. Mullaly announced that Volvo wasn't for sale "just now" but at the same time ordered a down writing of Volvo stocks, possibly in order to secure a sensible sales price for Volvo. Ford paid 50 billion SEK for Volvo back in 1999.
The current rumours of a Volvo sale coincide with recent revelations that Ford's finances are being badly squeezed due to failing sales on the economically weakened U.S. home market.
Full story in Danish
News category: Sweden
Published on this site: Jun. 29, 2008
Source: borsen.dk