Ford wants Volvo to run on more stand-alone basis
DETROIT (Reuters) - Ford Motor Co (F.N) said on Tuesday it is developing a new business plan for Volvo that will include the Swedish luxury brand operating on a more stand-alone basis.
The U.S. automaker said in slides posted on its Web site that it wants to "establish appropriate business arrangements to allow Volvo to operate on a more stand-alone basis."
It also said a "top priority is to return Volvo to sustainable profitability," according to the slides.
Analysts say Volvo is the most valuable of Ford's three European luxury brands. Ford, which has not broken out results for individual brands in the past, said that beginning this year it plans to disclose results for Volvo, which it acquired in 1999.
Volvo Chief Executive Fredrik Arp told the Frankfurter Allgemeine Zeitung newspaper that Volvo had a loss last year of about $160 million but had made progress and no major job cuts were planned.
"In the fourth quarter, we pretty much exactly broke even again already," he told the German paper.
Ford in November took Volvo off the auction block and said it would integrate Volvo more closely into purchasing and development efforts. At the time, Ford CEO Alan Mulally said the focus would be on improving Volvo's cost structure and brand positioning, although he stopped short of ruling out an eventual sale of the unit.
Ford is in the process of selling its Land Rover and Jaguar operations to India's Tata Motors Ltd (TAMO.BO) in a deal expected to close in the current quarter. Ford said in the slides that "significant progress" had been made in the talks with Tata and that "no major roadblocks" remain.
The slides were posted ahead of a presentation to analysts in conjunction with the Geneva auto show. The presentation was by Lewis Booth, a Ford executive vice president overseeing the automaker's European operations and its stable of European luxury brands.
Shares of Ford were down 15 cents, or 2.4 percent, to $6.03 in afternoon trade on the New York Stock Exchange.
(Additional reporting by James Regan in Frankfurt)
(Reporting by Ben Klayman; Editing by Mark Porter and Steve Orlofsky)
