Ford officially confirms China's Geely as preferred bidder for Volvo
Volvo S60 concept - click above for high-res image gallery
It's been rumored for months Chinese automaker Geely had the best shot at picking up the Volvo brand from Ford, and today, Dearborn has finally confirmed it. Geely was named as the preferred bidder this morning and the Blue Oval is proceeding with negotiations. However, this is not going to be an easy deal to close. Ford doesn't want to keep any stake in the Swedish company, although it does hope to continue some product cooperation.
In spite of the lack of shareholding, Ford doesn't want Volvo to wither on the vine and wants whoever buys it to have the resources to make it a going concern – unlike what happened when BMW dumped Rover. Perhaps the toughest nut to crack will be intellectual property concerns. Any time a sale like this happens, the seller is be concerned about leaving too much information lying around, and that concern is understandably amplified when dealing with an up-and-coming Chinese company. There is no word on when a deal might be closed, so in the meantime, busy yourself with the official release after the jump.
Gallery: Detroit 2009: Volvo S60 Concept
[Source: Ford]
PRESS RELEASE:
FORD CONFIRMS GEELY AS ITS PREFERRED BIDDER FOR VOLVO CARS
DEARBORN, Mich., Oct. 28, 2009 – Ford Motor Company [NYSE: F] announced today that a consortium led by Zhejiang Geely Holding Group Co. Ltd. is its preferred bidder in the ongoing discussions concerning the possible sale of Volvo Car Corporation.
Ford said that while it will be engaging in more detailed and focused negotiations with Geely, no final decisions have been made.
"Ford's objective in our discussions with Geely is to secure an agreement that is in the best interests of all the parties," said Lewis Booth, Ford Motor Company executive vice president and chief financial officer. "Any prospective sale would have to ensure that Volvo has the resources, including the capital investment, necessary to further strengthen the business and build its global franchise, while enabling Ford to continue to focus on and implement our core ONE Ford strategy.
"Ford believes Geely has the potential to be a responsible future owner of Volvo and to take the business forward while preserving its core values and the independence of the Swedish brand. But there is much work that needs to be completed in the more substantive discussions that are agreed to take place. We have no specific timeline to conclude the discussions."
While Ford would continue to cooperate with Volvo in several areas after a possible sale, Ford said it does not intend to retain a shareholding in Volvo.
John Fleming, chairman of Ford of Europe and Volvo Cars, said: "Ford fully understands the iconic Swedish nature of the Volvo brand and the responsibility we have as Volvo's custodian to its employees, local communities and other key stakeholders.
"Any sale also would need to take into account the significant connections between Ford and Volvo in terms of continuing component supply, engineering and manufacturing."
Ford and Volvo will maintain appropriate communications with key stakeholders, such as Volvo's employees, unions and the Swedish government, during the ongoing process.
"Volvo's management team welcomes today's announcement as a positive step forward," Volvo CEO Stephen Odell said. "At Volvo, we are continuing to keep our attention firmly fixed on engineering and building great Volvo cars, to reduce our cost base and to return the business to sustainable profitability at the earliest possible opportunity."
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Reader Comments (Page 1 of 4)
Shiftright 1:03PM (10/28/2009)
That makes me sad...
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G.G. 1:10PM (10/28/2009)
This could turn out to be the biggest mistake Ford has ever made and ultimately put them in the same position as GM one year ago and toss away their quality perception that they worked so hard to gain.
Too bad.
But all the power to the new owner.
zamafir 1:24PM (10/28/2009)
... how. Ford's washing their hands of volvo. their quality perception they've worked so hard to refine focuses on Ford products. Whatever happens to volvo isn't going to affect jon q public looking at the fusion.
the4thheat 6:58PM (10/28/2009)
This makes me excited actually, since Geely will probably almost go overnight to making the safest cars out there. Think of the hundreds of thousands of middle-class-but-not-rich-enough-to-buy-an-Accord Chinese peoples' lives that'll be saved.
I dunno if Volvo really has the kind of intellectual property for the kinds of powertrains generally favored by Asian manufacturers anyway.
Seemed to work for Ford anyway since their crash test ratings have improved rather considerably after acquiring Volvo.
Spiel 7:23AM (10/29/2009)
I have a newer Jaguar and my wife has a newer Volvo. When Tata took over Jaguar, it didn't really bother me at all, heck, they have more money to throw into Jaguar & LR. But with Geely taking over Volvo, that worries me.
Considering we have spent the last month arguing which of the two cars should be traded in for an SUV, the choice has just been made easier. Love you Volvo, but you gotta go.
ryuryuryturtuy 1:05PM (10/28/2009)
Is this political motivated, bribe? Why don't they (Ford) think about automobile industry in general instead only on themselves. Swedish government should step in about this matter. qinese government acquiring Volvo would be a foothold to penetrate to American, European and other markets where they cannot enter, it will affect the whole automobile industry negatively.
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Throwback 4:16PM (10/28/2009)
I hope you are kidding. How is Ford selling a money losing division going to be bad for the automotive industry? The Chinese are going to be selling cars world wide eventually. If the Ford brand can't make money it does not matter how many brands they have. Mullaly recognized this immediately after taking over.
some1 1:06PM (10/28/2009)
I think this will overall do more harm than good.
With hummer and volvo going to the china, it gives them an way into the north american market. More competition is the last thing needed.
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anonymous j 1:19PM (10/28/2009)
yeah man cause you know how ridiculous capitalism is.
G.G. 2:39PM (10/28/2009)
If you want to know what a Swedish company could look like in a few years after being purchased by foreign Asian investors, check out the Gothenburg based camera company Hasselblad.
In the end, the Swedes and the Chinese will do well working together, and this whole exercise will prove another painful lesson for Ford that they will regret in due time.
Randy915 6:51PM (10/28/2009)
The Chinese automakers deserve some credit for quickly ramping up to where Hyundai is about 5-7 years ago. By 2015-2010 you'll see cars as good as Hyundai cars right now and last time I recall there's are a lot of Hyundai's on the road around the world.
Our (USA) success in the future is intertwined with China's success, welcome to the real world.
ryuryuryturtuy 11:27PM (10/28/2009)
Randy915,
Through technology theft? That is what qinese car manufacturers are doing right now.
DJ 1:06PM (10/28/2009)
What they were really saying:
"Ford's objective in our discussions with Geely is to force an agreement with the Sweish government that is in the best interests of all the parties," said Lewis Booth, Ford Motor Company executive vice president and chief financial officer. "Any prospective sale to Geely would result in Volvo moving resources, including thousands of jobs to China, necessary to further strengthen the business and build its global franchise, while enabling Ford to continue to focus on and implement our core ONE Ford strategy. Only through extensive infusions of capital and tax breaks by the Sweish government can this action be avoided."
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IK84 5:31PM (10/28/2009)
joe : Except if the new owners don't buy the same ingredients for cost reasons, that steak wont taste the same. ;)
Luis 1:07PM (10/28/2009)
Volvo would be a competitor to Ford, so why would they not want it "wither on the vine" once it's sold?
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mikey683 1:18PM (10/28/2009)
Are people really going to buy Volvo's , (know for safety), from the Chinese, (who's every product is life threatening)?
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joe23521 1:48PM (10/28/2009)
Right, because Geely really wants to buy Volvo and actively make it unsafe.
mikey683 2:27PM (10/28/2009)
Well joe23521 every product that comes out of Chins is dangerous. Remember lead filled toys, wallboard that makes you sick etc. Why would Volvo be any different?
mikey683 2:32PM (10/28/2009)
Joe based on past performance I'd say yea they would. China routinely sells defective or dangerous products, I don't imagine Volvo under their control would be any different.
joe23521 2:59PM (10/28/2009)
Mikey, out of the literally millions of products coming from China, you've managed to list a handful of dangerous ones. Despite what the media wants us to believe, "every product that comes out of China" is not dangerous. A majority of them is fine, and some excellent. People probably said the same thing when Lenovo bought IBM's PC business. Those people aren't talking now.
I truly believe that the goal companies like Geely have is to make better and safer cars. That, and to enter the North American market. How better to do both than buying an established brand like Volvo? It's highly doubtful that they're willing to spend $2B to buy a brand just to destroy it.