It looks very much as if the Detroit Big Three are going to get the $36bn in loan guarantees they say they need from the US government to stay in business. The conditions attached are certain to be numerous and arduous, and are certain to include lots of government intervention in future management decisions.
One near-certainty is that Ford (Volvo) and GM (Saab) will be ‘encouraged’ to get rid of the Swedish car marques they own as soon as possible, to simplify the rescue procedures for the parent groups and ensure that US loan funds are directed to US activities. The German government made the same stipulation when it began recently began discussing the case for providing rescue loans funds for Opel.
The question is, what will become of the Swedish marques? One thing seems certain: the two automotive giants are likely to be a lot less fastidious about choosing new owners for them than Ford was when it sold Aston Martin and Jaguar-Land Rover. The situation is far more urgent, and it’s likely to be the US government driving the process. Ford has already let it be known that it values Volvo at around $6bn ($500k less than it paid in 1999) though few expect the Blue Oval to find a buyer at such a price.