Volvo Car Corporation is pushing ahead with a refashioned lineup, even as parent Ford Motor Co. negotiates to sell the Swedish brand to a consortium led by China's Zhejiang Geely Group Holding Co. Ltd. What gives? Is Volvo for sale, or not? That is a billion-dollar question.
We know for certain that Ford chose Geely as its preferred bidder in ongoing discussions to peddle Volvo. Selling Volvo is consistent with CEO's Alan Mulally's “One Ford” vision.
And now we know what the next S60 will look like. Volvo just released the first official pictures of the all-new Volvo S60, a 2011 model. The actual car will be unveiled in March at the Geneva Motor Show and then it will go on sale starting next summer.
Reports say the engine line-up could include an all-new 1.6-litre direct-injection EcoBoost gasoline turbo unit and a 1.6-litre diesel. We would certainly get the gas engine in Canada and can only hope the low-CO2 diesel is part of the mix, too.
This brings us to Odell, the CEO. He is a Ford veteran who was sent to Volvo to streamline operations and pull the Swedish brand out of its money-losing ways. He's a hard-charging executive and one of a handful considered to be a possible successor to Mulally.
Odell appears to be having some success at turning Volvo around. In Ford's recent third quarter results, Volvo reported a pre-tax operating loss of $135-million, compared with a loss of $458-million a year ago. (All figures in US dollars.)
So Volvo, under Odell, is reducing costs, juicing sales and improving the sales mix – making the Volvos that are sold more profitable. Volvo's third quarter revenue was $3-billion, up from $2.9-billion a year ago.
Is all this effort to fix Volvo and promote new models part of the bigger plan to sell Volvo – hopefully at a price close to what Ford paid for Volvo a decade ago ($6.5-billion)? Yes, I think so.
Since Mulally arrived three years ago, he's diligently worked at getting rid of any distractions, any barriers, to creating one Ford Motor Co. for the world. Ford has already sold off Jaguar, Land Rover, Aston Martin and its controlling interest in Mazda.
Meanwhile, Ford's old regional structure – in which various regional presidents operated with near-autonomy and products were developed for local markets exclusively – has been replaced by a global product development system and a unified management structure.
Ford now is making money (a nearly $1-billion profit in the third quarter) and the leadership team appears to have galvanized around the One Ford vision. The $23-billion in borrowed money Ford put in place before the recession has been used to develop and launch well-executed cars and trucks such as the Fusion mid-size sedan and F-150 pickup.
Based on Ford's recent track record, there is little to suggest Ford will not complete the sale of Volvo. Ford officials have said publicly that the company will not retain an interest in Volvo once it's sold, either.
Some might argue that Volvo has become too highly integrated with Ford, that a separation would be too complicated. Well, Aston Martin, Jaguar and Land Rover were integrated and many of Ford's senior management cut their teeth at Mazda. None of that stopped Ford from jettisoning brands that can never be part of One Ford.
Sure, there is an argument to be made for keeping Volvo. But I do not believe Mulally will let Ford stray from his vision of a Ford with one core Ford brand.
No one should look for Mulally's Ford to do a “GM” and hold onto Volvo, just as GM is holding onto Opel. Mulally has proven he's too disciplined for that.
It certainly is a pretty car and the design follows the look of other new Volvos, including the SC60 crossover.
In a statement, Volvo president and CEO Steve Odell said the all-new S60 “is sculpted to move you. It looks and drives like no other Volvo before and the car's technology will help you to be safer and more confident behind the wheel."
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