May 25, 2024

Push to sell Volvo, Saab units moves ahead


By Christiaan Hetzner and David Bailey

DETROIT (Reuters) – Under pressure to raise cash in the face of slumping sales, U.S. automakers General Motors Corp (GM.N) and Ford Motor Co (F.N) on Sunday said they were pushing ahead with attempts to sell Swedish brands Saab and Volvo.

Ford Chief Executive Alan Mulally, speaking on the sidelines of the Detroit auto show, said Ford had been in talks with several potential bidders for its luxury Volvo brand.

GM Chief Executive Rick Wagoner, meanwhile, told reporters that GM was also still seeking a buyer for Saab.

Sweden’s government has ruled out buying stakes in Volvo or Saab, but has offered credit guarantees of up to $3.1 billion to its struggling auto industry.

GM Europe Chief Carl-Peter Forster said GM had been approached two or three months ago by an investor looking to acquire Saab.

Forster said the Ford’s disposal of Jaguar and Land Rover to Tata Motors (TAMO.BO) last year could serve as a model for GM’s divestiture of Saab.

“We have one party that sort of volunteered, that came up and said ‘we are interested’ and we said ‘Fine let’s talk about it’ but we don’t know exactly what to do, how much, what are the conditions,” Forster said.

“We’ve put it a little bit on the back burner now. Because unless you have a good funding plan it’s a bit difficult and we don’t have a package we don’t know exactly what to sell if we sell anything. And we don’t have an offer to make yet.”

Forster dismissed any speculation that a sale could come before the end of March, when GM has to present a restructuring plan that shows the company has a viable business model.

“You can’t expect to sell a business like this in two months,” Forster said. “It takes a year.”

GM Vice Chairman Bob Lutz, who heads up the top U.S. automaker’s product development efforts, said GM had been hoping for a rebound in financial results at Saab for the nearly two decades it has owned the brand.

“Frankly they’ve been on GM life support,” Lutz told reporters. “It’s just an unending string of losses and the hope is always with the next generation of products they’ll make money and with the next generation of products they’ll make money but when you look at the financial results it’s just never happened.”

For his part, Mulally declined to name the parties that had been in contact with Ford about a sale of Volvo.

“We are not revealing the people we are talking to, but over time we will,” Mulally said.

Ford said last month that it was reviewing its options for Volvo. Mulally said that review had included contact with potential bidders.

“When we do a strategic review that is absolutely part of it,” Mulally said.

Volvo is the last remaining brand from Ford’s former premium auto group that had included the now-divested Aston Martin, Jaguar and Land Rover brands.

Last year, Ford sold its luxury Jaguar and Land Rover brands to India’s Tata.

Ford also sold about two-thirds of its stake in Japanese automaker Mazda Motor Corp (7261.T) for around $538 million in November.

“To be honest, the who-owns-the-company is almost irrelevant unless you’ve got a business that is viable and makes sense for the future, so you’ve got to deliver on that plan,” Volvo President and Chief Executive Stephen Odell told Reuters at the Detroit show.

(Reporting by David Bailey; Editing by Bernard Orr)

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