• Dec 23, 2009



Ford Motor Company has just announced that all major terms relating to the sale of Volvo have been settled between Ford and Zhejiang Geely Holding Group Company Limited. That doesn't mean that all the Ts have been crossed on the deal, but it does indicate that Geely has met all of Ford's terms for the sale to be complete. Ford has issued a press release stating that a definitive sale agreement will be signed in the first quarter of 2010, while the final sale won't take place until Q2.

Earlier in the month, former Volvo executives sent a letter to Ford Chairman Bill Ford, Jr. voicing their concern that Geely doesn't have the necessary resources to support Volvo. Not so, according to Ford's press release. The Blue Oval states "the prospective sale would ensure Volvo has the resources, including the capital investment, necessary to further strengthen the business and build its global franchise." And even though Ford will likely soon be handing over the keys to Volvo to a Chinese automaker, the company still intends to work closely with the Swedish automaker post-sale. That makes sense considering the fact that all Volvo products share platforms and components with Ford-branded cars and crossovers.

The sale will also go far in achieving Ford's goal of divesting itself of its non-core assets so the Dearborn, MI-based automaker can concentrate on matters closer to the Blue Oval's heart. Follow the jump to study Ford's brief press release. Thanks to everyone for the tips!

[Source: Ford]



PRESS RELEASE:

DEARBORN, Mich., Dec. 23, 2009 – Ford Motor Company [NYSE: F] confirmed today that all substantive commercial terms relating to the potential sale of Volvo Car Corporation have been settled between Ford and Zhejiang Geely Holding Group Company Limited.

While some work still remains to be completed before signing – including final documentation, financing and government approvals – Ford and Geely anticipate that a definitive sale agreement will be signed in the first quarter of 2010, with closing of the sale likely to occur in the second quarter 2010, subject to appropriate regulatory approvals.

The prospective sale would ensure 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 its core ONE Ford strategy.

While Ford would continue to cooperate with Volvo Cars in several areas after a possible sale, the company does not intend to retain a shareholding in the business post-sale.

More details will be made available once the expected definitive sale agreement is signed in the first quarter of 2010.



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    • 1 Second Ago
  • 110 Comments
      invisiblepigeon3
      • 5 Years Ago
      Then why'd you buy one?
      • 4 Years Ago
      GM---United States Department of the Treasury (61%)
      Geely----- Li Shufu(Founder and Chairman,90%)

      It's so obvious which one is the state-owned company.
      • 5 Years Ago
      That's too bad. :(
      • 5 Years Ago
      As I read these comments, I can't help but sense that people think this is the beginning of the end. And by that I mean the bubble that American and European markets had been closed from Chinese automakers to any real significance. Only time will tell if this was the best decision for Volvo and for Ford's prospects to staying more competitive. This might in actuality create a bigger headache for them down the road. Then that short money they took won't look like the best decision afterall.
      • 5 Years Ago
      It's sad; after several years of owning Volvos i should switch to a Japanese or German brand. I wish Ford just kills Volvo if they do not want to keep it up...
      • 5 Years Ago
      Why is this a bad thing? If anything, Geely will be even more protective of its now (legally acquired) IP than even western companies. They're one of very few Chinese manufacturers with direct know-how and even a western brand, don't you think they'd do everything the can to keep that out of their competitors' hands?

      This will likely turn out similarly to Lenovo/Thinkpad. There may have been a few slip ups, but Thinkpad still generally retains its reputation for quality products at premium prices, and Lenovo's now a respectable brand with solid market presence.

      This may even be something like VW/Audi. If my history is correct, VW acquired the Audi brand from Mercedes Benz sometime in the late 60s - who would've thought that Audi would become a leader in drivetrain development (Quattro) only after it left MB, an undisputed leader in most things automotive?

      Don't let skin color or language cloud your judgment - this is likely a pretty good deal for all involved (assuming Ford as any chassis engineers of their own left).
      • 5 Years Ago
      heart breaking...
      • 5 Years Ago
      How come that this small company has so much money to buy Volvo? You forget that China has 2T$ by hand and want to spend them as soon as possible. If a chinese company can buy an european company with advanced technology, I guess they don't mind to spend a bit more money. So, indeed, Geely will be taking loan from some Chinese bank.

      BTW, Geely just got 250$ from Goldman Sachs.
      • 5 Years Ago
      Geely would have to be completely blown up to improve as an automaker. Unless all the talent from volvo helps out the Parent Company, Geely has not mutch to gain realy. You can't teach creativity, or build your own technology if you don't have it in you. They ripped of countless designs and tech from other companies, it didn't seen to help them.
        • 5 Years Ago
        Same was said about Japan and Korea besides China/RoC pretty much have the microchip market cornered (Asus, Lenova Acer etc) 5 years ago they were manufacturing components for US companies like Packard Bell, Gateway, Compaq (good luck finding them in your local best buy) etc
        invisiblepigeon3
        • 5 Years Ago
        "Made in Japan" or "Made in Korea" is not the same as "Made in China". You can't compare those countries to a monstrous thing like what China has become.

        • 5 Years Ago
        wow theres just no end to pidgeon/matthew's gibberish. tell the japanese to return their entire culture and oral/written language to china, then talk. there are local DIALECTS on the mainland that are more distinct than spoken japanese is to mandarin.
        invisiblepigeon3
        • 5 Years Ago
        That's because there's no amount of theft that can make up for a lack of ability. The Chinese can knock off the designs of all the sunglasses and handbags in the world, but they can't make a good one from scratch.

        There's a reason: communism rewards the lazy and punishes the productive. As a consequence, their culture has come to value cunning and theft over making things that are good enough that people will pay for them. As a result, all they sell is cheap facisimiles of things that used to be made in other countries.

        Clothes, toothpaste, handbags, and now cars. What's next? Prefabricated Made in China houses?
      strang
      • 5 Years Ago
      What's with all this hate? The Chinese have done pretty good things in recent years in terms of innovations. Lenovo's IBM takeover wasn't disastrous. I can see a pretty good future for Volvo.
        invisiblepigeon3
        • 5 Years Ago
        @strang
        I don't care what anyone's opinion of me is, really. For what it's worth, though, I'd be much happier driving a UAW GM vehicle made in the USA, than anything made in China. I'd also buy one of those before I ever even allowed the remote possibility of buying a Chinese made car enter my mind.
        • 5 Years Ago
        @strang
        Politically, many people in this country don't see eye to eye with the Chinese. They view China as a threat. The Japanese and South Korea are our allies.

        China has been known to steal other ideas and designs. They lead the world in copyright infringement.

        I also think there is some anxiety at the thought that a large country like China would now have the design knowledge to enter the US market an under cut everyone involved.
        • 5 Years Ago
        @strang
        What's with the hate? Ignorance and racism when you get right down to it.
        • 5 Years Ago
        @strang
        @hypermiler: I'm assuming you are South Korean from your posts and it seems like you are very anti-China in your stance. I do not know why people like yourself are so negative. There should be a united East Asia just like a united Europe just like Hatoyama Yukio suggested. There has been too much tension for too long in the region. You should be pleased to have a rising China since China is one of the top trading partner of South Korea and it might be #1 in a few years just like how China is currently Japan's #1 trading partner.
        • 5 Years Ago
        @strang
        @ anonymous J

        That is incorrect. Japan and South Korea are independent governments who act in their own interests. An example of this is the major trade imbalance we have with Japan. Japan essentially prevents our products from competing in their home market. Yet, we allow them to openly compete here. This is largely because they built plants here that employ our workers. So there is a trade off. Still, that is one example of why you are incorrect in your assumptions.

        We have essentially slapped a tariff on Chinese tires and we may end up doing the same thing with Chinese cars. China is not the same as Japan and South Korea. Their track record on copyright infringement, stolen designs, environmental concerns, and human rights is far behind those of South Korea and Japan.

        This has shown up in our dealings with them. We have lead in children's toys, generic medications that don't work, copyright infringement, and so on. You should google the attempt that was made to inspect Chinese prescription drug plants to understand what I am talking about.
        invisiblepigeon3
        • 5 Years Ago
        @strang
        The Chinese have done good lately? What delusional rock do you live under?

        The Chinese government pays for hackers to commit crimes against US, they have poisoned people around the globe with their tainted food products, there's a new recall on something they've made about every five minutes, they are the biggest debt-holder for the US, and they're choking the entire domestic economy to death because no one can compete with their slave labor prices.

        Yeah, China is the biggest threat to the world at large, and you say they're doing "good". Why don't you go live in one of their work camps then?
        • 5 Years Ago
        @strang
        This is probably one of the hardest things I have ever had to do and I know I'll regret saying it.
        This is the only topic I can agree with invisiblepigeon. I don't now or ever will trust anything that has anything whatsoever to do with Chinese business. They make junk. Plain and simple. They copy, steal, counterfeit, forge, cheat, and do anything possible to push any credible business out of their way to achieve their goal. World economic dominence.
        I experienced this first hand going on three years now. I was awarded a bid for concrete work for presses and tube bending equipment at a factory that halfway through the job the operation was bought out by a Chicom investment firm. I was assured by both parties that the work will continue and the balance of what was owed to me would be paid without question. Three months to the day the papers were signed the plant closed and in the next two months all of the equipment and inventory was removed and shipped off to China. Eighty some employees including the entire management department lost their jobs and through the courts I'll end up settling for twenty cents on the dollar. I have no animosity toward Chinese people. It's the business morals and ethics that have given me a tremendous distrust for anything Chinese made.

        Don't get all giddy invisiblepinhead, I still think you're a putz.
        • 5 Years Ago
        @strang
        @sean

        the reason japan and sk can openly compete here while we cannot compete there is because the govt uses it as elbow grease when negotiations regarding our military bases there come up. japans govt begrudgingly bends to the will of america because of WWII. sk does so because of the korean war.

        @hypermiler

        they are for show, to placate the population, to provide the illusion of some kind of independence and defiance. in the end, both countries will ALWAYS do what america wants. just like the case with the US beef into sk, huge demonstrations for show, but in the end it still came in. just like in japan with the US base negotiations, even though they've been postponed, despite the rabid crime and rape caused directly by the base, japan WILL come to some sort of agreement to allow the base to stay.

        @caddy-v

        you and a lot of people all blame the buyers, but what about the sellers? maybe that's something you should all think about first before you go pointing fingers. keep in mind, NOBODY is forcing anyone to sell anything. geely didn't force ford to sell. chicom didn't force your factory to sell.
      • 5 Years Ago
      Volvo is all about safety, Chinese products are all about lead, cheap qualify and and NO SAFETY.
        • 5 Years Ago
        Vovo USED to be about safety. It is now about rebadging Ford products. On that point, it won't make much of a difference except to contribute cash so Ford can survive, as it haughtily refused government help and instead relied on mortgaging itself to the banks for cash on ruinous interest rates for fear the government would rightly question the wisdom of lending money to a company where a family that controls a minority of the shares has a majority of the votes. With the sale Ford will not be able to count on Volvo for larger vehicle engineering. With the loss of Mazda for small car engineering and the virtual shut down of its engineering and design programs in the United States, Ford becomes essentially a German company, much in the way which General Motors is re-making itself into a Chinese-Brazilian-Australian one.
        • 5 Years Ago
        I guess this deal will make them from producing least safe to the most safe car in matter of a year. Interesting to see how they will uphold volvo's brand in safety.
        • 5 Years Ago
        @Throwback - nope. See MG's sale to Nanjing and myriad of reports on keeping certain info from slipping to Geely.
        • 5 Years Ago
        Gratz to Geely!

        Once they trim some fat, and move all production to China, Volvo might be quite the profitable brand...
        • 5 Years Ago
        To zamafir
        I dont understand what you meant by the current fate of MG. MG assets and equipments were chosen to be sold to less qualified Nanjing by British themself. On the other hand for the better qualified bidder SAIC from Shanghai, Ford was afraid of its potential and took the Rover brand away. With only drawings papers(Honda destroyed rover45 paper) on hand, SAIC has no other way but to establish a Roewe brand to start building and selling cars. That's the whole reason the postsale MG was not doing well, because british purposefully chose to sell to someone that is not capable(Nanjing). and that's the exact reason why SAIC merged with Nanjing eventually to get the real MG brand and other assets.

        The current built MG and Roewe cars are no worse than they were still in british hands, new cars(Roewe550 and MG6) are designed (in Ricardo 2010) and currentlly selling pretty well in China. That's relatively quite a positive result judging from the winding story, hardship and short time after the sale.

        Really don't see your point of refering MG here.
        • 5 Years Ago
        Everything that makes Volvo worth buying is in Sweden and Ford has put a massive number of conditions on this sale. The engineering. The amazing test facilities. The talent is all in Sweden. Without it the brand is almost worthless. One has to think that Geely is aware of this and will use Volvo as a partner to help them improve their products as Ford did. Either way Ford's conditions on the sale will likely block them from doing anything stupid. Though as with the attempted sale of Saab for GM Ford's secret agenda that is best for Ford would of course be to get the cash for Volvo and then watch it go under. Truly sad. I really think Ford should have hung onto Volvo. I am sure they will hang onto most of the existing Intellectual Property but they are cutting themselves off from Future developments. Volvo has provided a constant source of safety enhancements not to mention platform engineering. The Ford-Mazda-Volvo partnership has been golden for them.
        • 5 Years Ago
        It's like saying to a person, "Hey, it's freezing and you don't have a coat! Hey, why did you just buy a coat?!"
        • 5 Years Ago
        @anonymous j
        Of course, don't you know that no matter what it's always the Chinese at fault? If we somehow manage to bury ourselves in debt it's obviously never our fault either-I mean how dare those Chinese dare to loan us money! And when we sell them things, it's also clearly their fault-I mean how dare they buy things we're offering to sell. The nerve!
        Clearly, China must have been the country that caused the stock market to crash last year as well, because nothing can ever, ever, be our own fault. Never.
        And if our car companies say...buy a certain swedish car company and benefit greatly from their platforms and safety technology, then essentially dump it when we got what we wanted because we don't want to deal with the costs of keeping it, we're of course not being jerkwads. But if a Chinese company wants to try and improve the safety of their cars by offering to buy what we're offering for sale it's clearly almost as bad as letting Volvo go bankrupt.
        • 5 Years Ago
        zamafir, MG was dead when they where fished off the scrap heap. Volvo has a following and a reputation that Geely is paying serious money for. I doubt they intend to kill the brand by making Volvo badged Geelys. It seems many folks on here think of all Chinese companies as dumb or unsophisticated. That is how Japanese and Korean car companies where once thought of.
        • 5 Years Ago
        Perhaps Geely will learn from Volvo. That is probably one of the main reasons for buying them
        • 5 Years Ago
        and of course Geely is the one to blame for purchasing Volvo, while of course Ford is absolutely innocent in all of this.

        typical bandwagon sheep mentality as usual.
      • 5 Years Ago
      Volve is an internationally established, engineering-driven and relatively upmarket brand with huge potential. Lincoln is a brand with upmarket aspirations based around badge engineering leveraging little international presence. Why would Ford ditch Volvo instead of shuttering/selling Lincoln? Strategically, that makes little sense to me beyond the short-term liquidity gain.
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