Ford says it may sell Volvo division

Ford Motor Company is considering selling Volvo Car Corporation to raise badly needed cash in the face of declining sales and an increasingly gloomy global economic outlook.

A review of strategic options for the Swedish-based automaker will likely take several months, Ford said in a release Monday.

Ford said the decision comes in response to the significant decline in the global auto industry, particularly in the past three months, and the severe economic instability worldwide.

It said the review of Volvo is in line with a broad range of actions Ford is taking to strengthen its balance sheet and ensure it has the resources to implement its product-led transformation plan.

"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," president and CEO Alan Mulally said.

"Volvo is a strong global brand with a proud heritage of safety and environmental responsibility and has launched an aggressive plan to right-size its operations and improve its financial results," Mulally said. "As we conduct this review, we are committed to making the best decision for both Ford and Volvo going forward."

The announcement comes a day before Ford, General Motors and Chrysler are to appear before the U.S. Congress to try to persuade politicians to give them $25 billion US in government loans to keep them afloat.

In their last appearance before the U.S. Senate Banking Committee on Nov. 18, the CEOs of the Big Three automakers met resistance from some legislators over their proposal.

They were told to return with detailed plans to demonstrate their long-term viability and offer skeptical members reassurance that the government money would be well spent.

The Swedish government has said it has been in talks with Volvo, as well as with General Motors's Saab unit, following reports that the U.S. parent companies were seeking aid for their Swedish-based divisions.