Ford Motor Co. (NYSE: F) is cutting production at its Volvo unit, according to The Wall Street Journal. The move, which could affect one-third of workers -- some 700 -- is seen as an attempt to cut the costs and losses at the upscale Swedish brand.

The question everyone is asking is whether this move is done in preparation for a sale. According to "people familiar with the matter" who discussed such things with the Journal, CEO Alan Mulally is interested in putting Volvo, whose sales have been declining, on the block. Of course, to analysts, Mulally sang a different tune last month, saying the priority is improve the Swedish auto maker operations "dramatically."

As Kirk Kerkorian's Tracinda Corp. continues to build its stake int he company, he may also have a thing or two to say on the matter.

For now, Volvo is cutting where it makes larger, less popular vehicles, and it plans to make fewer cars overall. But can this make Volvo more profitable for Ford, or at least more attractive to buyers? There are costs associated with producing a smaller number of vehicles, but with Volvo reporting 22,000 fewer vehicles sold during the first quarter, cutting production makes sense. Another matter Ford has to consider is the massive losses it suffered lately just from the kronor-dollar exchange rate.

Earlier today, Ford Motor Company (NYSE: F) announced that it had chosen to move into more "focused" talks with India automaker, Tata Motors Ltd. (NYSE: TTM) over a possible sale of its Jaguar and Land Rover units.

Ford, which sold its controlling stake in its Aston Martin unit last year for $931 million in cash and stock, has been searching for the right suitor for Jaguar and Land Rover. Although there are no details on the Tata discussions being made public, last month people close to the talks stated that the bids were running between $1.5 billion and $2 billion.

Ford spent a combined $5.2 billion for Jaguar and and Land Rover when it first took over the units.

Ford Motor Co.'s (NYSE: F) Alan Mulally has wasted no time in the last year as Ford's CEO in trying to right the ship of one of the world's largest automakers. He's severed ties with a whole slew of employees, closed facilities, and has somehow stepped up with a few design wins; most notably, the huge-selling Ford Edge small crossover (CUV). But that's just the beginning.

Ford's financial woes have and will continue until sometime in 2009 as Mulally slices and dices his way through the complete mess he inherited from former CEO and grandson of the company's founder, Bill Ford, Jr. Part of any restructuring is finding pieces of the company that one can lop off; that is, those that are non-core. Some of those large pieces happen to be Ford's European brands like Aston Martin, Jaguar and Land Rover. Aston Martin's already been taken care of, so that leaves the latter brands to sell off, and Ford now says it has four companies in line to bid.

Ford Motor Company (NYSE: F) is currently taking bids on parts of its Premier Automotive Group, which includes Jaguar, Land Rover and Volvo. (Another Premier brand, Aston Martin, was sold to investors in March for roughly $900 million.) There has been speculation that the Indian automaker Tata Motors (NYSE: TTM) may be interested in the two British luxury brands, but so far Ford has denied that it is selling Volvo. Ford's denials have been fairly weak, however, and it stands to reason that given Ford's rather desperate need for cash, it would sell the Swedish car maker -- the only profitable part of the Premier Automotive Group -- if the price were right.

It's pretty clear that Ford is in trouble, having mortgaged its plants and property -- and even its hallowed name -- to raise cash to support current operations. As Kevin Shult wrote last week, Ford is a symbol of the hard times facing American automakers, which are stuck offering large, heavy, inefficient vehicles to consumers who now want something better. There's plenty of blame to go around for the problems in Detroit. While many analysts focus on labor costs, especially retiree health care, I would argue that poor management, weak investment, and mediocre design and engineering are at least as important. And that's where Volvo can play an important role in helping Ford recover.

Looks like Ford Motor Co. (NYSE:F) is indeed selling "most" of Aston Martin back to its roots in Britain. A British-based consortium of buyers led by famed automotive engineer Dave Richards has agreed to purchase almost all of the Aston Martin automotive company from Ford for about $924 million. Richards is backed by Kuwaiti investors, who no doubt contributed a square amount of cash for the deal.

Ford is retaining about $77 million or a 13% stake in the famous British automotive moniker. So, the first large deal has been done in Ford's quest to start selling off pieces of itself that are not large profit generators. What will be next?

Ford needs to look at almost every division under its belt that is not performing up to set measured guidelines if it wants to get anywhere near back to profitability like new CEO Alan Mulally wants it to. If Ford's lackluster sales continue (Jan. and Feb. sales were disastrous), Ford is going to have to sell as much as it can to focus on its sole core business where it can be nimble and make money as consumer tastes continue shifting.

A number of people on Wall Street believe that Ford Motor Co. (NYSE:F) needs to sell off some of its non-core businesses. Some investors speculated that Jaguar would go first. Analyst estimates showed that the unit lost money in 2005.

However, it appears that Aston Martin will be the first unit out the door. According to media reports [subscription required], motor racing executive David Richards will lead a group that will pay $859.5 million for the small car company.

The sale still leaves Jaguar, Volvo and Land Rover in the house. Why Ford would want to own them is a mystery.

According to Ford's own figures, Jaguar's U.S. sales fell 21% in the first two months of 2007 to 2,581 units. It makes very little sense for a car company the size of Ford to bother with Jaguar. After all, Ford which sold almost 378,000 cars in the same market during that same period. Land Rover's sales were down 9% to 6,539 for that period.

No matter how high the margins are on these vehicles, there is no way that management can justify spending any resources on them given their small contribution.

Ford's problems appear to be getting deeper. Domestic sales fell 16% for January and February. If the company does not part with its other small car units it is making the mistake of not showing that it can focus on the businesses that matter.

Douglas A. McIntyre is a partner at 24/7 Wall St.

Ford Motor Co. (NYSE: F) opened at $7.81. So far today the stock has hit a low of $7.75 and a high of $7.98. As of 12:10 this afternoon, F is trading at $7.96, up 0.34 (4.5%).

After hitting a one year high of $9.48 in September, the stock has had some sharp ups and downs over the past six months. Credit Suisse upgraded F to neutral from under-perform today and lifted its price target from $7 to $8, citing possibly better-than-expected first quarter results from the automaker. Also, there is a report that Ford will sell its Aston Martin division by the end of the week. The technical indicators for F have been bullish but deteriorating, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.

For a moderately bullish hedged play on this stock, I would consider a September covered call at the $8.00 level. This trade could be risky if Ford doesn't stabilize its business, but even if the stock pulls back some, this position has about 12% downside protection.

Brent Archer is an options analyst and writer at Investors Observer (Free Subscription). DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about.

Will Ford soon sell the Aston Martin division as some investors and analysts have been clamoring for the past several years now? Pressure to sell off low-performing divisions has increased in recent quarters as CEO Bill Ford stepped down and former Boeing exec Alan Mulally came aboard to turn things around. He had the big job of getting Ford back into profit-making mode after the automaker posted some of the most disastrous results in its history in recent times.

Rumors circulating around this week's Geneva Auto Show say that Aston Martin may be sold by tomorrow (Friday). In fact, a "senior course" said that "It's a done deal. All that remains is to cross the t's and dot the i's." The new owner of the luxury car icon would most likely be a consortium of business interests from America and the Middle East, as opposed to an existing global automaker according to rumored reports.

The price Ford has apparently already settled on is rumored to be only half of what it was asking just six months ago, which may make the Aston Martin division somewhat of a bargain to the buyer. Is it a sign of an incredibly wasteful business decision that Ford lowered the asking price so drastically in recent times? Maybe it should have just sold the brand in a garage sale for a nickel or something.

MAJOR PAPERS:

• According to the Wall Street Journal's (subscription required) "Heard on the Street" column, Clear Channel Communicationss Inc's (NYSE: CCU) CEO, Mark Mays, is starting to sound desperate, afraid that shareholders would vote against a $26B takeover of Clear Channel by two private equity firms. Many investors have written off the vote's chances of success, as it needs 2/3 approval, unless a higher bid emerges.
• The Financial Times (subscription required) reported that Cisco Systems Inc (NASDAQ: CSCO) and IBM Corporation (NYSE: IBM) will today announce a partnership to develop software that combines voice, instant messaging and other communications services.
• Barron's Online's (subscription required) "Weekday Trader" feels that Dell Inc (NASDAQ: DELL), Nokia Corporation (NYSE: NOK) and Activision Inc (NASDAQ: ATVI) shares haven't reflected the companies' improving prospects.

OTHER PAPERS:

• The Telegraph reported that Aston Martin, which is owned by Ford Motor Company (NYSE: F), will be sold by the end of the week for an estimated GBP500M. The sale will go to a consortium of business interests from the U.S. and the Middle East, headed by Prodrive founder and owner David Richards.
• According to Polymerupdate.com (subscription required), citing an industry source, Koch Industries and the Blackstone Group are planning to team up to launch a bid for General Electric Company's (NYSE: GE) GE Plastics unit.
• The U.K. Times reported that BT Group plc ADR (NYSE: BT) rose yesterday on the London Stock Exchange on rumors that a private equity group was considering a leveraged buyout of the telecom company.
• Investor's Business Daily's "The New America" column mentioned steel giant United States Steel Corporation (NYSE: X) positively.

Ford Motor (NYSE: F) has definitely been undergoing some serious changes lately. Today came more news of firings for the auto giant with the company announcing that they will be slashing another 2,000 salaried employees.

It was only a couple of weeks ago that Ford said they would be offering buyouts to all of their 75,000 union workers, and today the news is that the company is going to be cutting 2,000 salaried jobs at its financing arm in North America. This move comes as Ford plans to consolidate their current 59 U.S. service centers to six by the end of next year. "As a company with strong business fundamentals, we believe this new structure will further strengthen our operational effectiveness," said Ford Motor Credit CEO Mike Bannister.

Ford is trying everything they can to cut costs and regain lost market share in the U.S. Over the last two and a half years the credit arm has been reduced by nearly 110 branches already throughout the U.S and Canada. The company has already indicated it will sell off Aston Martin, and have been very vocal in the desire to talk with Nissan and Renault should their talks with GM fail (and they look that could be).

Will Ford jettison the car brand made famous by James Bond, 007? Well, that's the latest scoop. Ford may sell off the Aston Martin brand in Europe, part of the global automaker's "Premier" auto division.

Lots of rumors milling around had either the Land Rover or Jaguar division(s) being sold, but with Aston Martin having its own independent dealer network -- among other things -- this made that brand most financially feasible to be sold.

Ford needs to focus on its core brands -- what makes the company profitable (like Ford vehicles, perhaps), so the Aston Marting sale may not be the last. Several other brands may be on the block soon, including Jaguar, Land Rover and maybe even Volvo.

With Ford CEO Bill Ford being somewhat hidden in recent comments, only time will tell if any of these Ford-owned brands will make it outside the Ford family to find a home somewhere else.

As a Ford investor, do you agree with the Aston Martin sale? It makes sense for Ford to let the clutches go on a non-core brand to solidify its balance sheet, although it's hard to say if the Aston Martin sale will be a decent or very good deal for the automaker.

Aston Martin's brand equity, as stated over at Autoblog, is much higher than in the late 90s when Ford purchased the brand, so perhaps a semi-premium price can be brought after all? At this time, no bidders have knocked on Ford's door, though.