So What About Geely And Volvo?
While bumbling GM so far hasn’t closed any of their cast-off brands deals, Ford’s Volvo sale to Geely appears to progress quietly, but steadily. The usually well informed and reliable China Car Times says that Geely is “feeling secure about the Volvo purchase.”
Ford has enlisted JP Morgan and Citigroup to assist with the sale, Geely has employed Rothschild. The deal is expected to close soon, “before the start of 2010.”
According to CCT, Geely is working off a seven point checklist:
1. Geely has secured loans and funding from the Bank of China to initiate a buyout of Volvo.
2. Geely plans to keep Volvo as an independent company, rather than merging it into Geely.
3. Volvo may buy parts from China.
4. Volvo keeps its current sales network already set up in China.
5. Volvo keeps its current production setup, and its R&D ability.
6. Volvo keeps its current contract with workers.
7. Volvo keeps its international dealer network.
That, and Geely’s plans to more than double Volvo’s world-wide sales should make everybody happy and keep other bidders at bay.
Ford should stop this sell for some time and gather some of the fruits of the new models.
Oh! So there's still hope for a resurrected 240 for the Chinese domestic market! OK, maybe not... but a tough, stout car like that would be perfect for the non-urban areas.
"3. Volvo may buy parts from China." "May," as in "is permitted to" or as in "might" or as in "will"? As in "will buy ALL parts from China"? I don't see this working so well anywhere where Volvo has any traditional customers expecting a certain overall manufacturing competency. And isn't it generally the labor costs which make European cars relatively expensive, so what's changing? Seems naive to pretend Geely doesn't want Volvo staff and facilities just long enough to show them the ropes (as Ford did), and then start building all-Chinese "Volvos."