Geely to buy Volvo from Ford for $1.8 billion

[Hot Mega]

Ford took a beating with the Volvo fiasco. Glad they finally were able to dump it.

STOCKHOLM – Zhejiang Geely Holding Group signed a binding deal Sunday to buy Ford Motor Co.'s Volvo Cars unit for $1.8 billion, representing a coup for the independent Chinese automaker which is aiming to expand in Europe.

The stock purchase agreement is subject to regulatory approvals and is expected to be completed in the third quarter, representatives of the two automakers said as they presented the deal at a news conference at Volvo Cars headquarters in Goteborg, on Sweden's west coast.

The agreement was signed by Geely's chairman, Li Shufu and Ford Chief Financial Officer Lewis Booth, and witnessed by Li Yizhong, the Chinese minister of industry and information technology, as well as Swedish Minister for Enterprise and Energy Maud Olofsson.

The transaction will be made through a $200 million note, while the remainder will be paid out in cash, Booth said at the Webcast news conference.

"We think it's a fair price for a good business, and yes, we're happy with the deal we've achieved with Geely," he said, adding that his company believes that, under Geely, "Volvo can continue to build its business and return to profitability."

Continued at link....

http://news.yahoo.com/s/ap/20100328/ap_on_bi_ge/eu_ford_geely_volvo

 

[Rey C.]

Volvo is the one brand that Ford is selling (has sold) that I never understood why Ford couldn't make it work. Solid brand with a good reputation and a cult-like following, but they just couldn't make the numbers (volumes) work. But I guess they needed this cash to pay down some of the massive debt they undertook back in 2006 or so. :dunno:

And say, isn't Geely the same company that was supposed to take Hummer off GM's hands? I get the ChiCom auto companies mixed up sometimes. So I wonder what steps Ford is going to take not to allow the technology it developed for Volvo (for other Ford platforms, like the Taurus) to come back and bite them in the ass?

 

[No_Man]

Volvo is the one brand that Ford is selling (has sold) that I never understood why Ford couldn't make it work. Solid brand with a good reputation and a cult-like following, but they just couldn't make the numbers (volumes) work. But I guess they needed this cash to pay down some of the massive debt they undertook back in 2006 or so. :dunno:

And say, isn't Geely the same company that was supposed to take Hummer off GM's hands? I get the ChiCom auto companies mixed up sometimes. So I wonder what steps Ford is going to take not to allow the technology it developed for Volvo (for other Ford platforms, like the Taurus) to come back and bite them in the ass?

That was Tengzhong (not that I'm any better at keeping them straight, either).

 

[lurkingdirk]

This is, I believe, good news for both Ford and Volvo. That income will help them eliminate some of their private sector loans which enabled them to avoid government bail-out money, and Volvo production costs have always been very high.

Plus Volvo might actually get some new cash infusion to improve current models. Sounds like a win-win.

 

[Namreg]

they never made any money off jaguar/land rover, but i think the indians who bought them can make it work. especially land rover seems to have potential.

volvo however, just sucks. the small car (c30 and s40) is literally a european ford focus sold at near-BMW 3 series prices. the s80 was a contender for the 5 series at best, so where exactly does that leave the s60?
and their engines are either old/crappy, and/or owned by ford. their truck (xc90) doesn't have full time AWD (only part-time, like a honda cr-v), and as far as i know they buy their gearboxes from an outside company (ZF?).

for the chinese, this might be a good move in the domestic market, as they will learn a lot and certainly will benefit from volvo's safety test center, but i don't see how they will be able to compete internationally. they would need to invest massive amounts of cash, and people are still wary of chinese-made cars.

 

[cartman24]

Probably for the better. Volvos are decent cars, but for what they are they are severely overpriced. Ford seems to be making some pretty big steps over the other American manufacturers lately, and this just eliminates an unnecessary distraction.

 

[BigSwede]

As long as they don't shut down any factories over here...

 

[melandruu]

Fuck Geely. I've hated em ever since I saw all their imitation cars. Copying everything frmo BMWs to Mercedez to Rolls Royces..Pathetic Chinese imitators. Hell they even create logos for their cars that look similar to the original logos.

 

[Rey C.]

That was Tengzhong (not that I'm any better at keeping them straight, either).

Ah right. Well, if GM allowed them to have a good long look at the design, Tengzhong will just come out with their own version next year called the Hommer. Hell, why buy something when you can steal it? :dunno:

Imagine if the safety problems that hit Toyota were to hit a Chinese made car. Good luck on getting them to even admit there was a problem, much less fix it. They're still not owning up to the issues with that drywall that's making people sick in the U.S.