China's Geely Volvo's Only Bidder

Robert Farago
by Robert Farago

Sweden’s Dagens Industri reports [via Reuters] that Ford is not spoiled for choice when it comes to selling the money pit known as Volvo. Despite speculation about a Swedish group’s offer for the moribund manufacturer, China’s Geely Automotive has submitted the only concrete bid so far. You may recall that FoMoCo CEO Alan Mulally began his administration by swearing up, down and sideways that Volvo was not for sale. Last month, The Glass House Gang announced that it was “in discussion” with a “number of interested parties” to ditch their Swedish subdivision. Party of one? As we’ve said before, Volvo would be a coup for Geely—countering America’s distrust of China’s ability to create safe products in a single stroke. While Ford could use the money (and how), dumping Volvo on the PRC would give Geely traction in both China and, eventually, the US of A. What’s a mother to do?

Robert Farago
Robert Farago

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  • John Horner John Horner on Aug 30, 2009

    "Anything the Chinese touch they cheapen through cost cutting and poor workmanship, just look at kids toys and the quality problems there." Meanwhile, China increases its market share of manufactured product (including toys) nearly every day. The high profile news reports about lead paint and such were a PR nuisance to the industry, but the move of nearly all production to China in toys, sporting goods, appliances, electronics and more is nearly complete. Where do you think the gotta-have toys like iPhones and flat screen TVs are made? I think Paul and I see this situation from different sides of the glass half-full, half-empty divide. If Volvo is really a dead man walking then it doesn't matter who gets a hold of it. If Volvo is a batch of valuable assets which have been recently mismanaged, then putting it in the hands of a competitor who is rapidly coming up the learning curve could lead to real headaches. So far the Tata-Jaguar-LandRover deal argues for Paul's view. Tata has to date done bupkiss for itself with the still money loosing English patients.

  • Sajeev Mehta Sajeev Mehta on Aug 30, 2009

    Volvo shoulda been as integral as Mercury, esp considering the technology shared from everything from headrests, safety gadgets and the unappealing D3 platform. You know, in a perfect world. But Ford doesn't have the time or money to integrate Volvo's operations entirely with Ford Europe, much less Dearborn. And if they never bothered to make the hard decisions (too many platforms, not enough sales) back in the days of the Premier Automotive Group, does anyone really think they can turn this sinking ship around now? And yes, I do know that Volvo was the most profitable part of PAG, but that's like saying the Chevy Aveo is better than taking the bus. So I'm with Paul, good riddance.

  • Durask Durask on Aug 31, 2009

    Chinese companies doing the same thing Ford did 10 years ago and the reasons are the same - megalomania and overconfidence. Let them have Hummer and Volvo. Maybe we can sell them Pontiac for a few bucks.

  • ZekeToronto ZekeToronto on Aug 31, 2009

    FreedMike wrote: I don’t blame Ford for dumping Volvo one bit. Aside from the XC60, Volvo’s lineup is a dud right now, and I haven’t seen anything coming down the pike that would brighten the future. You say that as if the current product lineup was somehow Volvo's fault ... and not Ford's (who were in fact calling every shot). Funny that folks are so worried that the Chinese will strip out the IP, lay off the workers and drive another storied old brand into the ground ... when that's exactly what Ford and GM did to Volvo and Saab.