VOLVO, HUMMER AND SAAB TO BE SOLD?

Current economic conditions are forcing every auto maker in the world to rethink how they do business, how they make their vehicles, how they market and sell them, how they treat workers etc. The big three American motor companies General Motors, Ford and Chrysler, are in big financial trouble at the moment. So deep in the soup these three are that two could be out of business by the middle of 2009 if the US government doesn’t lend them money. They are asking for US$34 billion to start with, up from the US$25 billion they had initially asked for a few months ago. Inflation sucks doesn’t it.

Following these revelations they have gone to the US government in Washington with their collection hats in hand, asking for money. Should this not work, options are available, including declaring bankruptcy. The other options are to sell some of their brands for cash.

Ford already went this step a year ago when it sold Jaguar and Land Rover to Tata Motor of India. They then followed up by selling most of their stake in Mazda Motor Corporation. Recently speculation has been rife that it wants to sell Volvo, and today reports say Ford has put a price of some US$6 billion on Volvo. Ford had bought Volvo for US$6.4 billion in 1999.

Now GM may be on that path as well, and the brands which could go, if buyers are found, are HUMMER, Pontiac, Buick and SAAB. Opel is also feeling the pinch, but may be safe yet. Selling Opel would kick GM out of Europe and leave it with only Chevrolet as its major brand. I don’t see GM getting rid of Cadillac or Isuzu, but then again, these are the strangest of times.

As for the Chrysler group, there is great value in Jeep and the mother brand itself, but Dodge is a bit of a dodgy one, so to speak. With all the major motor manufacturers trying to sell, who is going to buy? It can only be private groups, groups like Cerberus, the owners of Chrysler. Otherwise we can look east for salvation where Indian and Chinese automakers would love to have a well-recognised, western auto brand in their stable, not only for potential profits but for that status attached to it.