As predicted by TTAC, the sale of Volvo from Ford to China’s Geely will be signed this Sunday. A Volvo spokesman confirmed this today to Reuters. Details of the deal will be announced at a news conference in the Swedish city of Gothenburg.
The news conference, which may take place today or on Monday, “is to talk about the stock purchase agreement between Ford and Geely,” said Volvo spokesman Per-Ake Fröberg. “According to the plans, they will sign the agreement during the day,” Fröberg, said to Stockholm News.
Geely chairman Li Shufu arrived in Sweden on Saturday from China. Also present to sign the agreement will be Volvo Cars CEO Stephen Odell and Ford’s CFO Lewis Booth.
Chinese Vice-President Xi Jinping, who is in Sweden this weekend, is expected to be present at the signing. “But we can not confirm that,” said Fröberg. Additional security measures surrounding the event indicate the presence of a high government member. China’s National Radio sees Li Yizhong, Chinese Minister of Industry and Information Technology, attend the festivities.
On Friday, recalcitrant unions had caused last minute unease by withholding their blessing for the deal. The unions demanded more information about capital needs and the make-up of the management of Volvo.
On Saturday afternoon, the union representatives once again sat down in a meeting, this time with Ford’s CFO Lewis Booth. After the meeting, the unions “pronounced themselves satisfied,” as the Sidney Morning Herald reports.
“We have received all the information that we were looking for,” Glenn Magnusson, head of the Ledarnas union, told Sweden’s TT news agency.”As far as the unions are concerned, we are in favor of the agreement.”
Reportedly, the deal will net Ford $1.8b in cash, less than a third of what Ford paid for Volvo in 1999. It will also free them of a loss-making entity.
TTAC has been following this story, for over a year. Again, Ford is successful where cross-town rival GM fails. They can sell cars. They can sell companies. Stock watchers predict a big move of the Ford share at Monday’s opening.
In reality, this won’t make much change to the car themselves. They’ll still be based on Ford platforms and parts and Geely are only buying the company to have a foothold in western markets. They can’t really learn much from the cars as Ford will no doubt hold the patents and copyright over the technologies used in Volvos.
Will Geely stifle Volvo’s safety orientation? We knew Ford wouldn’t because that was a big chunk of the reason Ford bought them.
Good for Ford. Another win for the blue oval boys.
Maybe GM should contract out to Ford to handle the sales process for their brands?
Another win for the Blue Oval? JLR sales are up 60% YTD and they are back in profit. And remember they were making strong profits pre recession anyway….
Selling Volvo may make sense but selling JLR is already looking like a bad move. The Jaguar XF is a monster sales success in Jag’s home market and Land Rover sales are recovering at an incredible rate….
Sales isn’t the goal. Profitable sales are. I’m not saying JLR is or isn’t profitable. My belief is that one company can no longer maintain lots of brands. Those days are gone. So Ford just needs to make Fords as good as they can as sell them for as much as they can.
Could be first real multinational Chinese car company ? Will they run it like Tata and JLR ? Or absorb it and do what happened to Rover ? In three to four years will we see Euro market cars or Chinese market cars or some awful average of the two?
What is Ford thinking? Volvo is the only Ford-brand that luxury import buyers would consider. The way it’s going with Lincoln’s MK-whatever cars, It ain’t going to happen with Lincoln. I really like the Volvo SUVs, and I was very close to buying an S60R before the boneheads stopped building their R vehicles. But I’m not going to ever touch a Chinese owned vehicle.
Volvo was the least of Ford’s problems. Unibody controlled collapse in collision is not effectively patentable. That’s why access the structure departments are so heavily controlled. The Chinese will blindly copy every doubler, gusset, notch, and moment pivot. Eventually they will figure out how each works and why they’re in those locations.
This will come back to bite Ford – it’s just a matter of time (dependant on Chinese market maturity). Except for possibly the highest line, European production will be gradually phased out. Cheap Chinese cars that don’t collapse like wet paper mache will be a body blow to America’s auto makers.
Another win for the Blue Oval? JLR sales are up 60% YTD and they are back in profit. And remember they were making strong profits pre recession anyway….
Selling Volvo may make sense but selling JLR is already looking like a bad move. The Jaguar XF is a monster sales success in Jag’s home market and Land Rover sales are recovering at an incredible rate….
When the storm was over now one can say they could have managed very easily, but FORD was surviving on Saline solution almost desperately going to try Laetrile.
The XF does look like a over grown Camry or Lexus, is really hard to see it being a big hit.
Ford was very much at the end of the rope anyways, anything to lighten the ship was a Godsend.
GM could learn a few tricks from Mulaly anyways.
Atleast William Clay Ford had the vision of stepping aside and look for someone to be at helm, he did even made an offer to Dieter, but Dieter politely refused it.
In the most recent JD Power Durability Study, Ford, Lincoln, and Mercury brands all ranked above Jaguar, Land Rover, Volvo, and Mazda. Disposing these quality laggards boosts Ford Motor’s quality average.
As these studies are by brand (and internally by model,) getting rid of a brand won’t change an average that doesn’t exist.
edit: Dependability Study.
JD Power Durability Study is likely a joke, like most JD Power studies.
I do so enjoy Asian Vo-Gee-Gees…
China step into international car market via Volvo, big gain.
It would be nice if the failed D3 platform went too…