By on October 5, 2009

Game on! (

We jumped on Alan Mulally last week for sitting quietly on a $2.5b offer for Volvo from the Chinese automaker, Geely. At the time we told him to take the offer and be glad of it; after all, no one else would pay that much for a brand that hasn’t made money in nearly a decade. Or would they? Of course Alan knew more than we did, and over the weekend the truth emerged: Volvo has another bidder! The Wall Street Journal reports that the Crown consortium, led by Ford director Michael Dingman and former Ford and Chrysler executive Shamel Rushwin, are making a play for the Swedish marque. Crown is trying to lure former Volvo executives (including former CEO Roger Holtback) on board with a third of new Volvo equity in hopes of “emphasizing the Swedish nature of the company.” But can Swedish roots (or at least a good dye-job) match up with Chinese cash? The downside to the Geely bid is that the new company would walk away from pension obligations and inventory, making the deal worth less to Ford than the offered $2.5b. Meanwhile, SAIC is reportedly still in the running to buy Volvo as well. This one is still far from over.

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7 Comments on “More Volvo Suitors Materialize...”

  • avatar

    Will it end up like Saturn?

    We’ll see.

    It’s like a soap opera around the automotive world these days…. sheesh.

    Yep, just because I saw it coming (hence, found a like mind in Robert Farago and started coming here to comment) doesn’t mean it’s any easier to fathom the “whys and wherefores” of how it all came about.

    At least, I should say, it’s way too complex to make into a dime-novel.

  • avatar


    All that is happening is a correction.

    Unfortunately, that correction isn’t being allowed to happen. Due to bailouts, government loans and cash for clunkers schemes, demand is being artificially propped up.

    Having said that, it’s easy to see why these acquisitions are coming around.

    Because most of these companies are on their last legs, other companies are looking at them as bargains. And because of success stories like Nissan, Mazda and Chrysler (in the 80’s) it’s quite easy to think a company could replicate it and turn a huge profit with a little hard work.

    However, for every success story, there’s Daimler-Mitsubishi, Daimler-Chrysler, BMW-Rover, Ford-Jaguar/Land Rover, etc.

    What companies fail to remember, is that these failing companies are at knock down prices for a reason. They’re toxic.

    Which brings me back to my “correction” comment earlier. Let the market kill these companies and it’ll be better in the long run.

    Mind you, who would I moan about if GM and Chrysler left? Probably Volkswagen? I’ve never like the Germans that much….

  • avatar
    John Horner

    Volvo has ten times more going for it than Saturn. Heck, Saturn didn’t even actually have any factories or designs of its own and GM wanted to sell just the brand name and a pile of dealership contracts. At the end of the day, there really was nothing to buy for a buyer picking up Saturn.

    Volvo, on the other hand, is a small but fully developed company with designs, factories, tooling, test grounds and everything else needed to actually be in the car business. Volvo also has a global sales footprint with strong dealers and brand recognition in most major markets. Saturn was a weird USA only niche brand of no value elsewhere.

  • avatar

    KatiePuckrik :
    October 5th, 2009 at 3:31 pm

    Unfortunately, that correction isn’t being allowed to happen.

    And it’s not being allowed to happen because the overall health of the economy is more important than some vague business-school lesson about “free markets.”

  • avatar


    And has Robert Farago has already pointed out (many times) it would have been cheaper to give each member of staff of GM and Chrysler $100K and shut both companies down.

    Both companies would have left huge holes in the market which could have been taken up companies like Ford, Toyota etc, which could have made them stronger. The more sales they have, the more staff they could have taken on.

    But you’re right, this way is far better for the US economy. To spend taxpayers (and China’s) money on companies which have little concept of failure because they know the government will be there to help them out. It makes total sense for people’s (people like Waitresses, Nurses, Wal-Mart staff, etc) taxes (which included tax on fuel, sales taxes, etc. They all pay that) and use it to subsidise people who earn $30K or more. Far more than they earn.

    Meanwhile, companies like Ford have more of a chance of failing because they tried to do it by themselves.

    For the record, I’m not a big believer in free market economics. But what I do believe in is living by the sword and dying by it.

  • avatar
    Kristjan Ambroz

    At this point in time I am a bit mre worried that Saab will go down the Saturn route than Volvo. Although to be honest (and it pains me somewhat to say this, given the long association my family had with Volvo) the automotive landscape would hardly be any poorer if the brand were to disappear in the near future.

  • avatar

    FreedMike :
    October 6th, 2009 at 12:21 am

    And it’s not being allowed to happen because the overall health of the economy is more important than some vague business-school lesson about “free markets.”

    It can be said for many things.

    People spend two months of salaries to buy a big useless piece of carbon. That’s not exactly stimulating the manufacturing sector, so:

    Marriage shouldn’t be allowed to happen because the overall health of the economy is more important than some vague literature-school lesson about “true love.”

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