Reports Auto Giants Volvo and Renault to Join
Oct. 10, 1989
STOCKHOLM, Sweden (AP) _ AB Volvo said Tuesday that it was holding discussions with France's Renault, although it would not confirm published reports that the automakers were in final negotiations for a merger or joint venture.
The business magazine Veckans Affarer, in its Wednesday edition, said it had confirmation from sources at Volvo, Renault and the Swedish government of the merger talks.
''We are conducting talks about cooperation with Renault, but I don't want to comment on their content, on which level the talks are being held and the possible timing,'' said Krister Goransson, Volvo's information director.
Thomas Clifford, a spokesman for Volvo in New York, said the company had confirmed that Volvo was talking with Renault and with Spain's Empresa Nacional de Autocamiones SA, although he had no further information about the topic of discussion.
Renault's information chief, Olivier Cochet, confirmed in Paris to the Swedish news agency TT that negotiations were taking place with Volvo.
''Renault aims to break its isolation before 1992 and is looking for a partner to bring costs down,'' TT quoted Cochet as saying.
But the talks with Volvo were similar to talks Renault was having with other automaking concerns, Cochet told the Swedish agency.
The new concern would have 250,000 employees and revenue of about $39 billion, Veckans Affarer stated.
Volvo has been seeking to safeguard its position in Europe once the European Economic Community establishes open borders in 1992, because Sweden has said it would not ask to join the community.
Volvo is by far Scandinavia's largest company in the private sector, reporting a pre-tax profit last year of $1.3 billion.
Aside from cars, trucks and buses, Volvo has diversified into food, marine and industrial motors, aerospace and trading. Volvo is the general agent for Renault cars and light trucks in Sweden.
Volvo spokesman Hans Rehnstrom told the Associated Press the talks with Renault were not initiated because of 1992.
He said the main concern ''is structural issues...Volvo is a small producer in the big world.''
Rehnstrom said Volvo needs a broader range of products and cars, adding to its current series of big cars aimed at high-income buyers.