Ford Considers Unloading Volvo
Ford Motor Company is considering offers for Volvo, the Swedish car maker that Ford bought in 1999 for $6.5 billion. Robert Siegel talks with Micheline Maynard, of the New York Times, about whether the move signifies a broader "back to basics" shift in Detroit.
ROBERT SIEGEL, host:
Interested buyers, take note. Bids are due later this week for Jaguar - or as they say in Britain, Jaguar - and for Land Rover. Both of those luxury car brands are currently owned by the Ford Motor Company. And now there's news that Ford is considering selling a third European brand in its portfolio, Volvo. Ford bought Volvo in 1999 for $6.5 billion.
Micheline Maynard is Detroit bureau chief for the New York Times and joins us now. First, we should note that Ford has not come out and said it's selling Volvo, but it's not denying that it's looking at offers either. Is there a big difference there?
Ms. MICHELINE MAYNARD (Detroit Bureau Chief, The New York Times): Well, I think the difference is that they don't want to look desperate. I think what Ford is trying to do is see what they could get for Volvo and who might be interested. I don't think they have any interest in a fire sale. They would like to get at least what they paid for it and hopefully a premium.
SIEGEL: What's the strategy here in selling off these prestigious brands that Ford acquired not all that long ago?
Ms. MAYNARD: Well, Ford has a new - relatively new chief executive, Alan Mulally, who came from the Boeing Company last year. And since he got there, he's really been pushing Ford to focus on its basic car business both in the United States and overseas. And, you know, these brands are wonderful brands. They're world-famous, instantly recognizable to car fans, but, unfortunately, they haven't sold the way that Ford hoped that they would. And I think Mr. Mulally sees an opportunity to raise money and to refocus Ford's efforts.
SIEGEL: Now, we paid a lot of attention to what happened at Chrysler, a venerable American automaker that was bought by a European automaker and then sold. In this case, with the European carlines, I mean, Volvo or, for that matter, Jaguar, would they change much by the fact of their ownership by an American carmaker?
Ms. MAYNARD: Well, I think, you could definitely say Jaguar was. In fact, they did try to get us to pronounce Jaguar with three syllables but I'm sticking with the American pronunciation. And actually, when I was driving over to the studio, I was driving behind a blue car and I originally thought it was a Ford Taurus. And when I came up on the front of it, I could see that it was indeed a Jaguar. There was what they call platform sharing, where the underpinnings of vehicles were shared between Ford and Jaguar.
There were some attempts to make Jaguar sort of a more up-to-date and sexy-looking brand, rather than a low slung brand that was aimed at sort of the most discriminating wealthy car buyers. They tried to make it hip to be honest. And I think that worked for a little while when Americans had a lot of money to spend on cars, but as the market started to fall apart earlier this decade, people have just shifted away from that brand.
SIEGEL: Now I have to - I say this as a confessed owner of an aged Taurus, but does it help sell Jaguars to make them look like a Ford Taurus?
Ms. MAYNARD: Honestly, I don't think so and I think that was one of the big problems that there was this sort of feeling that Ford was homogenizing these brands. It didn't do as much with Volvo. And, in fact, when Volvo was sold to Ford back in Sweden people were saying, please let Volvo be Volvo. And I think Ford tampered with Volvo less than it did with Jaguar. But it also had less time to tamper with Volvo. They've owned Jaguar since 1990.
SIEGEL: Well, who's out there who might buy a Swedish carline?
Ms. MAYNARD: Well, BMW is mentioned most frequently and, in fact, there were some reports in Europe a couple of months ago that they were the company that had gone to Ford to ask for information about Volvo. It really should probably be someone in the luxury car business with a lot of money and the sort of temperament and patience to run a Swedish car company, because the people at Volvo are very proud people, very good engineers, but apparently a little resistant to change.
SIEGEL: Well, Micheline Maynard, thank you very much for talking with us about it.
Ms. MAYNARD: My pleasure.
SIEGEL: That's Micheline Maynard, who is Detroit bureau chief for the New York Times.
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