In recent years, Ford has sold off valuable assets, including Aston Martin and Hertz Rentals. They're currently flogging Land Rover and Jaguar to India's Tata Motors (fingers crossed). Although Ford's got plenty of cash for the time being– having mortgaged itself up to the eyeballs in '06 for $23b– the American automaker's just about out of stuff to sell. So is Ford is going to have to face the music and… start selling cars? Analysts quoted in the International Herald Tribune say you got that right. John Casesa claims Ford couldn't get diddly squat for Mercury (who?), Ford Financial or Volvo. That's because "interest from private equity companies had pushed takeover prices sky-high, but the credit squeeze that began last year has made it harder for those companies to borrow, forcing asset prices down." Oh, and Ford Financial is staring at a credit meltdown and Volvo isn't making any money. In fact, Ford wrote down about $2.4b of the Swedish brand's value in January. So there really is nothing left for Ford to do but make and sell profitable vehicles in the North American market. What are the odds? (Hint: check the stock price.)
Find Reviews by Make:
Well, there’s always Chapter 11.
I read this article and disagreed with much of what it said with regards to Ford’s asset sales. There’s a difference between selling assets just for cash and selling assets to focus on your core business. Hertz, Jag/LR, Aston and all the ACH plants are all being offloaded to keep Ford focused on its core business – not to raise cash; that’s what that mortgaging was all about.
Ford has more cash on hand than any automobile company right now. They don’t need more cash. They need to get their mainline business straightened out. So, the end of their asset selling to me is more of a positive statement: they’ve finally shed themselves of stuff that prevented them from focusing on their core business and functions. Now, it’s only about the cars, which is risky enough right now. But everything we’ve seen from increased quality numbers, to their upcoming product cadence, and their cuts in overall costs shows that positive momentum is in fact building. Let’s just hope it is sustained.
Volvo is valued at jack because it didn’t turn a profit this year?
That’s harsh!
Cases, like this, show how it’s difficult to grow via acquision. Organic growth is the better.
I still don’t know why Ford didn’t pursue Sir Anthony Bamford about him buying Jaguar and Jaguar alone. That would have been a major headache off Ford’s head.
Ford / Mazda / Volvo are an excellent match, in my opinion. It seems that the collaboration has been so far most pronounced in Europe. Lincoln and Mercury are superfluous at that point.
Ford has SUV/truck expertise; Mazda has small cars, engines, and engineering; and Volvo has safety and quirkiness. The C-1 platform was by all accounts a worldwide success (too bad we never saw a Ford-branded product stateside out of it). The CD3 platform (Mazda6, Fusion, Edge) has also been great for the parent company. Jaguar and Land Rover, however, add nothing to that mix.
The C-2 platform cars (next S40/Mazda3/Focus), Mazda2 & Fiesta, the new Mazda6 and Fusion, should do wonders in 2009-10 to get the company back into competition.
If Ford can focus their brands and refresh the product they have a decent portfolio as mentioned above. TTAC has pointed out several examples, however, of how they are losing the plot regarding brand focus.
As RF has pointed out, keep Volvo focused on safe, family-oriented vehicles. Don’t try to compete with BMW.
Scrap Mercury and invest in Lincoln in order to resurrect it as a premium brand. Start by building that Continental concept. Don’t be afraid to make it expensive. But to do that they must also drop the Lincoln name from anything that does not scream premium (MKZ I’m looking at you.)
Mazda has a solid rep carved out for small, zoom zoom cars. I’m not sure where the CX-9 fits. I’d say scrap it, except it is a nice looking example of the genre.
Keep Ford as the full-line value brand.
If they can successfully offload Jag and LR I think they have the potential to build some strength.
Ford Financial may not be a particularly attractive asset now—–but the credit crisis will not last forever and most likely will ease in the next 12-18 months.
In the meantime—-as RobertSD has pointed out—Ford have plenty of cash (albeit highly leveraged)to carry out their transformation plan. Come 2010—if they need cash—Ford Financial will probably be a more attractive play.
I’ll put money on Volvo being sold by September.
KatiePuckrik : I expect the employee/departmental overlap of Landy and Jag is pretty substantial. Granted I agree with you, but Ford didn’t want to rock the boat back then. (They should have, for the sake of both brands)
dean: the Continental concept better be priced like a modern day LS 400. That was one helluva luxury sedan for $32,000-ish back in 1990, and it put Lexus on the map. If they don’t keep the price reasonable, it’ll be the Continental Mark II all over again.
You are right about that Bamford deal Katiepuckrik but what the heck to we really know. I saw where Tata was going to immediately offload Jag when they settled. What about Mazda? Pretty successful as of late but do they contribute to Ford coffers? Apparently not. Different companies and cultures under one umbrella probably lets lots of cash slip through cracks
Ford could sell their souls by doing a different “special edition” Mustang every month.
Oh wait, never mind.
Ford would be better off selling Volvo, Jag and getting rid of the fabulous Mercury brand. Lincoln still has a quite the brand heritage and potential if they would stop taking fords and re badging them with fake aluminum interiors, and actually separating the Lincolns from fords then they have a chance. A lincoln should NEVER drive or sound like a ford does, they should be complete opposite of each other. Its sad to see the Koreans building a better luxury car (Genesis) than the FoMoCo. The mustang and F150 are the only two real products with loyalty they sell. The Fusion and new Taurus are “Ok” but not up to Asian standards. I cant believe that I am saying this but the focus should just be a rebadged Mazda 3 with good styling (not the monster they are selling now). If they can promise a 10 year/100,000 mile warranty and build vehicles with the highest standards possible then they can survive but we know that won’t happen.
Ford could use the same platform for both the new Continental and build the interceptor concept as the next Crown Vic and there goes any worries about spreading the development costs. Of course, they should make each look as close to their concepts as they can. Not two slab-sided cars or two rounded edge cars with different badges.