A Lenovo-IBM-Like Deal Between Ford And Geely About Volvo?

Bertel Schmitt
by Bertel Schmitt

Unfazed by Swedish unions calling for an investigation into the Ford-Volvo-Geely deal, Geely is getting itself ready to swallow the big Swedish fish. The deal is already being feted as episode two of the takeover of international icons by the Chinese.

Whenever someone tries to cite a successful foreign takeover in China, he’ll inevitably shout “Lenovo!” In 2005, Chinese government-backed Lenovo had acquired the former IBM PC Company Division, along with their ThinkPad line of notebook PCs for approximately $1.75b. In a five year transitional deal , IBM helps to market and to support the products. For a few years, the Lenovo-made Thinkpad even carried the vaunted IBM logo. Then, Lenovo thought their brand is stronger than IBM’s and dropped the logo.

The not quite closed Geely-Volvo deal is already lauded as the “Lenovo-IBM” of the auto industry, says Reuters. According to an unnamed source, “Geely Chairman Li Shufu wants to do something like Lenovo-IBM.”

The same source said that the deal “is expected to be done before Chinese New Year, and then Geely will quickly launch integration.” In 2010, the Chinese Lunar New Year will start on Feb 14.

Unusual for a Chinese company, Geely is bringing in heavy foreign artillery: Geely has hired German-based Roland Berger Strategy Consultants to launch a 100-day internal review and restructuring to improve Geely operations. Geely also signed Deloitte Touche Tohmatsu to work on post-acquisition integration for Volvo.

With the IP questions settled between Geely and Ford, the remaining issues should be relatively minor. Unless Geely and Ford really want to copy the Lenovo-IBM deal. With Ford helping to market and to support Geely-made Volvos. These days, everything is possible.

Bertel Schmitt
Bertel Schmitt

Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

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  • Varezhka I have still yet to see a Malibu on the road that didn't have a rental sticker. So yeah, GM probably lost money on every one they sold but kept it to boost their CAFE numbers.I'm personally happy that I no longer have to dread being "upgraded" to a Maxima or a Malibu anymore. And thankfully Altima is also on its way out.
  • Tassos Under incompetent, affirmative action hire Mary Barra, GM has been shooting itself in the foot on a daily basis.Whether the Malibu cancellation has been one of these shootings is NOT obvious at all.GM should be run as a PROFITABLE BUSINESS and NOT as an outfit that satisfies everybody and his mother in law's pet preferences.IF the Malibu was UNPROFITABLE, it SHOULD be canceled.More generally, if its SEGMENT is Unprofitable, and HALF the makers cancel their midsize sedans, not only will it lead to the SURVIVAL OF THE FITTEST ones, but the survivors will obviously be more profitable if the LOSERS were kept being produced and the SMALL PIE of midsize sedans would yield slim pickings for every participant.SO NO, I APPROVE of the demise of the unprofitable Malibu, and hope Nissan does the same to the Altima, Hyundai with the SOnata, Mazda with the Mazda 6, and as many others as it takes to make the REMAINING players, like the Excellent, sporty Accord and the Bulletproof Reliable, cheap to maintain CAMRY, more profitable and affordable.
  • GregLocock Car companies can only really sell cars that people who are new car buyers will pay a profitable price for. As it turns out fewer and fewer new car buyers want sedans. Large sedans can be nice to drive, certainly, but the number of new car buyers (the only ones that matter in this discussion) are prepared to sacrifice steering and handling for more obvious things like passenger and cargo space, or even some attempt at off roading. We know US new car buyers don't really care about handling because they fell for FWD in large cars.
  • Slavuta Why is everybody sweating? Like sedans? - go buy one. Better - 2. Let CRV/RAV rust on the dealer lot. I have 3 sedans on the driveway. My neighbor - 2. Neighbors on each of our other side - 8 SUVs.
  • Theflyersfan With sedans, especially, I wonder how many of those sales are to rental fleets. With the exception of the Civic and Accord, there are still rows of sedans mixed in with the RAV4s at every airport rental lot. I doubt the breakdown in sales is publicly published, so who knows... GM isn't out of the sedan business - Cadillac exists and I can't believe I'm typing this but they are actually decent - and I think they are making a huge mistake, especially if there's an extended oil price hike (cough...Iran...cough) and people want smaller and hybrids. But if one is only tied to the quarterly shareholder reports and not trends and the big picture, bad decisions like this get made.
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