Forty years ago, the North Koreans and the Swedes entered into an agreement where the latter’s socialist and industrialist interests aimed to bring recognition to the former’s regime while filling its pockets from the country’s mining industry. Part of this agreement included 1,000 Volvo 144 GLs, which were meant to be paid in copper and zinc.
But that was 40 years ago.
Newsweek reports North Korea, under Kim Il-sung’s regime, ultimately absconded with the Volvos and other Swedish goods during a Swedish-Korean trade fair in Pyongyang, all within the same year the vehicles were delivered.
Since then, the Swedish Export Credits Guarantee Board has calculated the interest owed on the debt linked to those goods. Total debt after inflation plus interest holds at kr3 billion ($428 million USD).
As for the Volvos, they were ordered for taxi service within the North Korean capital. As of 2008, those cars were not only still running, but, according to photographer and entrepreneur Tor Rauden Källstigen, were treated well:
I think I’ve never been inside such an old car even back home in Sweden. This taxi was very well maintained too, close to mint condition it seemed.
Were Il-sung’s grandson and current ruler, Kim Jong-un, to sell the vehicles at current book value, he would net $2.6 million — or 0.6 percent of the debt — for the trouble.
$428 million is possibly enough for Volvo to develop a new product. So pay up, North Korea!
Well they’re still right in Pyongyang according to the license plate.
But this is sort of like saying “Oh I was ripped off by my Sterling dealer in 1990, they owe me $450 plus interest, so $25,000.”
So now Volvo is Chinese owned and China is N Korea’s one and only ally with money (Castro ain’t got none) so maybe it will all forgiven?
Since Volvo knew this was a risky deal the credit was guaranteed by the Swedish Export Credit Guarantee Board, so when North Korea sort of defaulted on the credit, Volvo got paid by the Swedish government credit insurance. The money is now owed to the Swedish government, not to Volvo.
Furthermore, this deal was made with the old parent company of Volvo Cars, AB Volvo, which remains an independent publicly traded company that is a global leader in heavy trucks (brands include Volvo, Renault Trucks, Mack Trucks, UD Trucks, Dongfeng, Eicher) as well as Construction Equipment (branded Volvo CE or SDLG), buses (Volvo, Prévost, Nova Bus) and marine / industrial engines (Volvo Penta).
AB Volvo makes Prevosts?
Neat, learn something new every day.
I guess North Korea is printing its superdollars at full capacity as we speak.
Who can print faster, NK or the Fed? Tune in next week and find out!
Socialists trusting socialists: win-win!
Especially since capitalists have never ripped off a single person in their life. /sarcasm
I’m out of this political game, it’s like watching people argue to the death whether AIDS is better than cancer and vice versa.
No, no, we’ve moved on its Ebola vs Cancer now.
Describing Sweden as “socialist” just shows that you don’t know what the word means. Left of the U.S.? Of course. Higher taxes, more government programs, and a more assertive regulatory system? Of course. But industry remains steadfastly private (and by many measures it is easier to start a business in Sweden than the U.S.).
Did you read the article? This deal was driven by socialists within Sweden that wanted to legitimize the socialists in North Korea. Then there’s the little matter of the debt being held by the Swedish government…
yeah CJ because a country with a socialized health care system is the same as North Korea’s govt. derp.
“Did you read the article?”
You missed the part about the Swedish industrialists who thought at the time that North Korea represented a great business opportunity.
Maybe now, but back then…
1974 wasn’t a good year for the West. A presidential crisis. Shows how boring Sweden is if this is all that can be conjured from the last 40 years. A bad business deal. Seek better partners instead of profiteering from animosity.
Must have been an end run of 144’s? Wasn’t that close to 244 time?
Don’t worry, the Swedish government’s policy of importing all the world’s conflict zones will guarantee some more interesting headlines over the next 40 years…
Rather reminds me of a deal my former employer made with Chrysler several years ago. Made a deal to send a tankwagon of OEM clearcoat to one of their assembly plants with the stipulation that if Chrysler liked it they’d pay for it; if they didn’t like the coating performance it was free. Coated a couple thousand or so vehicles with it very successfully. Of course, as the last car was drying, Chrysler informed the company that they didn’t like the coating…..