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Behind The Wheel

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Dec.01

3:54 PM ET

Monday, 1 Dec 2008

Volvo Sale Would Signal Big Changes For Big 3

Posted By:Phil LeBeau

Sectors:Automobiles and Parts

Companies:General Motors Corp | Ford Motor Company

AP
Call this the start of the Big 3 becoming the smaller 3. Starting tomorrow and playing out over the course of the next week Detroit's auto makers will be telling Congress how they plan to get back in the black. For the American auto makers it will likely mean shedding brands.

Ford is now looking at selling Volvo. It's a brand with an incredible reputation worldwide that should bring Ford between 1 and 1.5 Billion dollars. In better times, Volvo would bring bigger bucks. That said, Ford will take what they can get.

And this is probably just the start. When GM sends its business plan to Congress tomorrow, I suspect the auto maker will say 2-3 of its brands will go away in the next couple of years. They could be sold or they could just be folded. Either way, we're on the cusp of seeing a leaner, and certainly smaller, Big 3.

Ford May Sell Volvo in Attempt to Raise Cash

How much of this right-sizing will involve cutting jobs and closing more plants remains to be seen. You can bet UAW president Ron Gettlefinger will be in Washington telling Congress that his union is ready to re-work its contracts and help the Big 3 survive. How that might happen is unclear.

The point is our American auto industry is going through its biggest shake-up in decades. It will run from the top of the GM offices in Detroit all the way out to the smallest dealership in Arizona. When it's all said and done, many of the brands and models we have grown up with or have come to love will disappear, transfer to a new owner, or change in some radical fashion.