April 13, 2007

Volvo to keep marine engine, aircraft parts units

Volvo AB Chairman Finn Johnsson said the truckmaker intends to keep its marine-engine and aircraft-components operations, responding to a call from a major investor to dispose of the units and narrow the focus, Bloomberg News reported today.

"There are presently no plans to change the present structure of the group," Johnsson told Bloomberg said in an e-mailed response to a request for comment.

Swedish investor Christer Gardell said in an interview published yesterday that Volvo should dispose of the units as they "are so small, and there are really no acquisition opportunities in those areas." Gardell, who holds as much as 10 percent of Volvo's votes, argued the board should focus on the larger commercial vehicles and construction equipment units.

The Volvo Aero and Volvo Penta units combined accounted for 7.5 percent of Volvo's 2006 sales. Volvo is the world's second-biggest truckmaker behind DaimlerChrysler AG and the third-biggest maker of construction equipment including diggers and pavers. Volvo should either spin off Penta and Aero through a share sale or sell the divisions outright, Gardell said.

Source: The Detroit News

No comments: