IPD ran a great article within the past 2 years on the retirement of the 240 from the Volvo lineup. I'll attempt to summarize it:

The 240 was basically a dated design. Volvo had planned a FWD replacement from the mid-80's or so, which would incorporate even more designed-in safety features and would be more assembly-friendly (unlike the 240, which begins life on the assembly line with the blower motor). Further, the 900 series were Volvo's ultimate refinement of the RWD package, using the venerable 4-cylinder driver train, and the 240 wasn't that much less expensive. They also recognized that, being a niche manufacturer (small volume), they had to define their market niche and that was "upscale", not solid cars for the masses. Their first FWD effort, the 850 series,
was in the design and development stage for the better part of 10 years.

All this pre-dated the Ford acquisition.