When looking over the Volvo S60 sedan – my favorite new product at this month's Geneva auto show – I started wondering whether it was too late for Ford to reverse its decision to sell the Swedish brand?
Who cares that executives at Ford and China's Zhejiang Geely Holding Group last week said the deal is on track to get done by the end of the month. Since September 2009, we have seen the collapse of multiple deals that seemed nearly completed.
Saturn was supposed to go to Penske; Opel/Vauxhall was supposed to go to Magna International; and Saab was supposed to go to Koenigsegg.
All of those deals blew up at the last minute.
There are a number of reasons why Ford would be wise to just pull away from Geely.
1) Ford is already rid of its most expensive and most time-consuming distractions – Aston Martin, Jaguar and Land Rover – so it has more time to concentrate on the Blue Oval.
2) Volvo is much more integrated within Ford in terms of platforms and engines than the three British brands.
3) Volvo's near-premium market position is more coherent with what the ONE Ford plan aims to achieve globally.
4) Volvo is still Ford's center of competence for safety, an area that has taken on a whole new level of importance as we watch Toyota's reputation for reliability ravaged by its sticking accelerators and poor-performing brakes.
5) Volvo has its most complete and diversified product portfolio ever featuring a small car, the C30; large cars, the S80 and S60; a coupe-cabrio, the C70; and two stylish crossovers, the XC60 and XC90.
In December 2008, right as the recession was starting to ravage automakers, Ford decided that it had to sell Volvo and focus solely on the future of the company's most important brand.
“Given the unprecedented external challenges facing Ford and the entire industry, it is prudent for Ford to evaluate options for Volvo as we implement our ONE Ford plan,” Ford CEO Alan Mulally said at that time.
Fast-forward to March 2010 and we see that the Blue Oval is not completely out of the woods yet, but it certainly can see daylight ahead.
Deciding to retain Volvo would signal that the worst is really over at Ford.
One final reason not to sell Volvo is that in 1999 Ford paid $6.4 billion for Volvo. Handing it over for about $2 billion is a bargain – for the buyer!