Ford (NYSE: F) may finally have some good news for investors. So far this year, all the company has been able to say is that it will probably not need government funds to stay afloat but that the US car market faces another big drop in vehicle sales. That has pushed Ford's stock down to $2.
Ford has been talking about dumping businesses to raise money. One of these units is Volvo. Most analysts assumed that there would be no buyers. Credit to finance such a deal would be too hard to come by.
Now it looks like one of the Chinese car companies may bid for the Swedish car company. If so Ford's investors can look forward to some much-needed capital to come into the firm's treasury.
According to The Wall Street Journal, "Companies expected to express interest include Chinese auto makers Geely Holding Group, SAIC Motor Corp. and Chongqing Changan Automobile Co."
It is not clear what Volvo would fetch. Jaguar and Range Rover were sold to Tata Motors for over $2 billion a year ago. That was before the global climate for vehicle sales took its sharp drop. Even if Ford can get only $1 billion, it would help the company which is said to be burning more than $1 billion in cash a month.
The Chinese car firms may have access to government capital which would make a buyout easier. China has wanted to expand into foreign markets. This may be its chance. Ford shareholders get to see their company pick up a few dollars in the process.
Douglas A. McIntyre is an editor at 24/7 Wall St.
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