Fri Feb 06,
Paul Raman, CFA
Highlighted tickers include Ford Motor Company (F) and Tata Motors (TTM).
Ford Motor Company (F) is very close to selling Volvo in an effort to generate enough cash to stay away from the bailout trough in Washington. The potential buyer would be Geely Automobile Holdings, which is a Chinese company. Ford would take a loss and get less than the $6.4 billion that it paid for it in 1999.
Geely, a maker of $6,000 compacts in Asia, is seeking to grow in the US and Europe. They wanted to buy the company a year ago, and were rebuffed by Ford. As Ford became more desperate last December, talks were rekindled. Geely has received all Chinese government approvals already. The Export-Import bank of China will finance the acquisition.
Sales for Volvo have been down over 60%, and Volvo lost $736 million pre-tax in last year’s fourth quarter alone. This is a continuation of a retreat from the luxury market. Ford had previously sold Land Rover and Jaguar to India’s Tata Motors (TTM) last June.
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