More Volvo Suitors Materialize
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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@FreedMike 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.
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.