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ICQ>
Dan,
The small red wire you mention is called the D+/61 feed in DIN speak. What it does is two things, 1. supply ground to the dash warning lights, and 2. supply the current necessary to get the alternator to start working. This is called the excitiation current, because it excites the alternator (ok it's an old joke but I can't resit How do you excite an alternator? "Hey alternator I love you")
The wire fits into a recess in the back of the alternator (look hard it's not real obvious) There are two other wires on the back of the alternator. A large red wire which is the battery positive lead (disconnect the battery) and a blue wire which is the ground (yes, it is necessary the alternator is rubber mounted) If yours is an external regulated unit there is another cable (with three wires in it) leading to the regulator. BTW an internal unit is a direct replacement for the external unit. I changed my 79 over a few years ago.
The disconnected wire is the reason for the lack of dash lights, but you probably had an alternator failure, and had been running on battery for a while.
When you get the car running again check the voltage at the battery terminals with the engine running, it should be between 13.5 and 14.5 volts. This is quick and dirty test to tell if the alternator is doing anything. It may not be producing the required amount of amps, but it is doing something.
I hope this helps
Rick Ewald
Volvo master technician
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