Cash-strapped and facing falling sales, automakers General Motors Corp. (GM) and Ford
Motor Co. (F)
said they are actively trying to sell their non-profitable Swedish brands Saab
and Volvo.
Ford’s chief executive Alan Mulally said the company has been in talks with a handful of potential bidders for Volvo,
but didn’t elaborate whom the company is speaking with. Likewise, GM Chief
Executive Officer Richard Wagoner and Europe Chief Carl-Peter Forster claim GM
was approached by an investor to buy Saab, Reuters
reported.
“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.
Volvo is the last foreign brand left in Ford’s family of brands after the
company famously unloaded its Jaguar and Land Rover brands to Tata Motors Inc.
(ADR:TTM)
last year.
Also, Ford divested about two-thirds of its stake in Mazda Motor
Corp. in November, which netted the company about $538 million.
For the short term, Forster said the company is putting the sale of Saab “on
the back burner now”because there isn’t a funding plan or sales package in
place.
GM Vice Chairman Bob Lutz told Motor Trend Magazine
that the company has been supporting its Saab brand for more than 20 years even
though the line has been unprofitable for all of them. Its now-laughable Hummer
brand is also up for sale.
“When you really are under severe financial stress and you have loans that
you have to repay, you start to reprioritize,”Lutz said.
Sweden’s government was once considered a buyer for Volvo and Saab, but has
since ruled out buying stakes either brand.
More Money for Big Three
Buried under all the headlines from the Detroit Car Show, is the fact that GM
and Chrysler LLC are positioning for more money from the $700
billion Troubled Asset Relief Program (TARP).
Chrylser officials said the company is seeking another $3 billion after receiving $4 billion in TARP
money last month, The Detroit News reported. It
originally asked the U.S. Treasury for $7 billion.
GM was promised a $13.4 billion lifeline stretched out over 2009 depending on
how well the company cuts operational costs. GM is due for $5.4 billion this month and another $4 billion in February
if Congress releases the second half of the TARP money, Bloomberg
reported.
