Volvo To Geely Deal Falling Apart?

Edward Niedermeyer
by Edward Niedermeyer

Chinese automaker Geely has been pursuing Volvo for 10 months now, and it’s beginning to look like the chase was in vain. Bloomberg reports that disagreements over Volvo’s intellectual property are about to scuttle the deal, the same reasons GM gave for rejecting Beijing Automotive’s bid for Opel in July. The problem, it seems, hinges on product integration. Volvo’s vehicles are all based on Ford platforms, so giving Geely access to current and in-development Volvo models means trusting them with the special sauce. And Ford is even less likely to do that, after a former Ford employee was arrested last week for attempting to pass some 4,000 secret documents to SAIC and Beijing Auto.

But there’s more to this than just stereotype-fueled fears of Chinese intellectual property thievery (after all, when has Ford had a problem sharing platforms with Mazda?). Another group of bidders has stepped into the picture, headed by former Ford and Volvo execs. And besides having another potential buyer, Volvo’s US sales finally showed signs of life last month. As Bertel Schmitt recently editorialized, Geely needs to man up and work out a deal while the getting is good. After all, the concept of intellectual property goes hand-in-hand with managing an international brand. Either Geely figures this out soon, or it simply isn’t ready for the big time.

Edward Niedermeyer
Edward Niedermeyer

More by Edward Niedermeyer

Join the conversation
4 of 18 comments
  • Autonut Autonut on Oct 21, 2009

    There is not much needed to fix a Volvo in North America. Elsewhere Ford has problem called Ford. In Europe Volvo does not sell because Fords fit and finish is as good as Volvo and ALL Volvo engines and transmissions available as Fords for much less coin. In Europe even Lexus does not sell the same engine and transmission in Toyota, it would not fly. The only way to fix Volvo outside of US is to stop selling identically equipped Fords. Not a solution Ford wants to use, I am sure.

  • Bertel Schmitt Bertel Schmitt on Oct 21, 2009

    Intellectual property, my eye. A whalesized red herring. And it stinks. Western car companies have shared intellectual property with Chinese for more than 20 years. In joint venture companies. Giant universities that teach the Chinese how to design, assemble, market, and sell a car. These universities have a tuition fee: Share the profits. Ford already sold Volvo IP to China, for a fee: They have a joint venture with Dongfeng. No IP problems there. But when a deal goes sour, the public is being bamboozled with the IP bugaboo. Don't fall for it. Ford shared IP with Stalin and Hitler. They can sell outdated designs and tooling to China just as well. Jeez, GM has a huge engineering center in Shanghai where they breed future technology at Chinese prices. That's way more sensitive than selling a "current tech" company. "Current tech" is 5 years back.

  • ZekeToronto ZekeToronto on Oct 21, 2009

    Agreed ... in this context the IP excuse is laughable. I wonder what really went wrong?

  • Autonut Autonut on Oct 22, 2009

    Bartel, A+