Volvo-Geely Deal: Trouble In Paradise?

Edward Niedermeyer
by Edward Niedermeyer
volvo geely deal trouble in paradise

We’re ready to seal the deal. If the deal fails, the problem is not on our side. We have not violated any part of the agreement. The situation is changing constantly…and the process of the negotiation is very tough. We will put as much effort as we can. I hope the deal can be done

Geely Zhejiang Chairman Li Shufu is sounding defensive in today’s Wall Street Journal, as his firm’s deal to buy Volvo from Ford drags on. And he won’t say what’s holding things up on Ford’s end either. After all, the money is there, and Ford (allegedly) isn’t sweating the IP details… so where’s the beef? Ford spokesfolks say the Blue Oval’s

position hasn’t changed since 23 December last year. As Ford and Geely said at the time—and as we’ve continued to say—we expect to sign a sale agreement in the first quarter.

That gives the Volvo-Geely deal two more weeks, not long considering the deal has been over a year in the making. So why is Li Shufu getting so antsy? Is this end-of-deal nerves, or is the Geely-Volvo deal going the way of HUMMER-Tengzhong?

Join the conversation
  • John Horner John Horner on Mar 19, 2010

    Ford should kill the deal for the strategic reasons I've ranted about in past threads ....

  • Crash sled Crash sled on Mar 19, 2010

    It's too bad for the Chicoms that they're not dealing with the former bunch of Billy's golf buddies on Ford's Board, as this deal woulda been sealed long ago, likely at 1/2 the current price. Now, they have to deal with the cold-blooded aerospace engineer from Kansas, who seems to have consolidated his power, and seems to be making intelligent decisions at Ford, for the first time in decades. I'm not convinced that retaining Volvo is good or bad, but getting fair market value on a sale is a solid business decision, and the quiet Kansan seems to be holding out for that. The Chicoms seem to have gotten used to planting themselves onto a spot, smiling, serving tea and waiting for somebody to throw money into their laps. It's worked so far, as the greedy capitalist pigs have fallen all over themselves to get into that 1.3B potential market. But does that approach support a healthy long term business model? That's the question they're gonna have to start answering, and it looks like they finally are doing that.