Reuters reports that Geely's Li Shufu said that Volvos will not be built in China (by Geely). Chang'an's current contract to continue to build the Volvo S40 and S80 in Chonqing will eventually expire.
JM this is what USA Today should have included but for the breadth of view you have.jmsteiny said:What a HUGE boost for Geely.
Access to better auto technology,
future access to the american market through the existing Volvo dealer network,
a positive reaction from the international auto and financial markets......
a win/win deal from what I see.
I can see Geely leaving Volvo alone for right now and using it's newly acquired Volvo technology to upgrade and improve it's Geely/Emgrand/Gleagle products........
THEN in about 3-4 years setting up a new entry level brand in America/Europe through the Volvo dealerships (perhaps the Emgrand products).
Think about it people.....Geely didn't just buy a car company - they bought a EXISTING DEALER NETWORK (complete with infrastructure in place) in America and Europe (and Japan too, I assume).
Geely just bought themselves a ticket to the "big 3 auto market" party - the spotlight will be on them now to see WHEN and HOW they will show up to the party.
Not so fast, that would kill the brand! Many people buy Volvo cars in Europe, because they have a swedish feel, and because they're built in Sweden by great workers. A chinese Volvo might sell in China, but nobody would buy it in northern Europe.COPE2 said:do you guys think they will move most of the volvo manufacturing plants to china? there is really no point to keep the operations in sweden, other than to benefit swedes. i think they should move all manufacturing to china and bring a few head managers from the old volvo to china. have them work there for a few years. train the locals, and then get rid of the swedes.
European Union regulators on Tuesday approved Chinese carmaker Geely to buy Sweden’s iconic Volvo Cars.
The European Commission said it sees no antitrust problems with Zhejiang Geely Holding Co.’s $1.8 billion acquisition of Volvo Cars from Ford Motor Co. because the takeover won’t give either company the power to damage rivals.
Geely sells hardly any cars in Europe and Volvo only has “very limited” operations as a car parts supplier, it said.
Geely’s acquisition of Volvo from Ford Motor Co. has been heralded as a breakthrough deal for China’s auto industry, giving one of its most ambitious automakers a well-known, prestigious global brand and access to top-tier technology.
The deal could give Geely a critical edge in China, which is the world’s biggest auto market and one in which foreign brands often dominate. It will also gain its first major foothold in Europe.
Geely, meaning “lucky” in Chinese is a privately-run company that has gradually built its business selling cars, motorcycles and scooters with little government support.
It teamed up with the Chinese state-owned investment firm Daqing to buy Volvo. It says it will spend an extra $900 million to expand production and make Volvo profitable again.
The EU’s executive said its Tuesday approval would not affect any decision it could make on European state subsidies for Volvo.
The car maker received state guarantees from Sweden last year to help it secure euro500 million from an EU government-backed bank. The money was earmarked to develop fuel-efficient cars.
Ford has been trying to sell Volvo since late 2008 to focus on its core Ford, Lincoln and Mercury brands.
http://www.autoblog.com/2010/08/02/ford-officially-sells-volvo-to-geely-for-1-8b/FORD MOTOR COMPANY COMPLETES SALE OF VOLVO TO GEELY
DEARBORN, Mich., Aug. 2, 2010 – Ford Motor Company [NYSE: F] today announced it has completed the sale of Volvo Car Corporation and related assets to the Zhejiang Geely Holding Group Company Limited.
The total purchase price for Volvo and related assets set forth in the agreement signed in March 2010 was $1.8 billion, including a $200 million note and the balance in cash, with the cash portion subject to customary purchase price adjustments at closing. Pursuant to the terms of the agreement, Geely today issued the note and paid $1.3 billion in cash to complete the sale. The estimated purchase price adjustments used at closing are expected to be finalized and settled following final true-up of the purchase price adjustments later this year. The final true-up is expected to result in additional proceeds to Ford.
"Volvo is an excellent brand with a strong product line, and it has returned to profits after a successful restructuring. We are confident Volvo has a solid future under Geely's ownership," said Alan Mulally, Ford's president and CEO. "At the same time, the sale of Volvo will allow us to sharpen our focus on the Ford brand around the world and continue to deliver on our One Ford plan serving our customers with the very best cars and trucks in the world."
Ford will continue to cooperate with Volvo in several areas to ensure a smooth transition, but has not retained any ownership in the Volvo business. Ford will continue to supply Volvo with, for differing periods, powertrains, stampings and other vehicle components. Ford also has committed to provide engineering support, information technology, access to tooling for common components, and other selected services for a transition period.
Agreements between Ford and Geely govern the use of intellectual property; these agreements will allow both Volvo and Ford to deliver their business plans and establish the proper use of each other's intellectual property.
"The Volvo team has made tremendous progress in restructuring its business and delivering results during the sale process," said Lewis Booth, Ford executive vice president and chief financial offer. "We believe this agreement will provide Volvo with the necessary resources, including the capital investment, to strengthen the business and to continue to move it forward in the future. We wish Volvo's management team, employees and new owners every success for the future.
"Ford appreciates the support of the Volvo management team, Volvo's labor unions and the government officials in Sweden and China during this transaction," Booth added.
As previously announced, Stephen Odell, CEO of Volvo Car Corporation, is returning to Ford as group vice president and Chairman and CEO of Ford Europe. Stuart Rowley, CFO of Volvo Cars, is returning to Ford as chief financial officer, Ford Europe.
"Volvo is a proud company with a talented and dedicated team of employees," Odell said. "I am especially pleased that with Ford's continued investment in recent years, Volvo is well positioned for the future with an exciting range of products that remain true to its core values – safety, quality, environmental responsibility and modern Scandinavian design."
Geely Holding Group Completes Acquisition of Volvo Car Corporation
Stefan Jacoby Named President and Chief Executive of Volvo Cars; New Board Unveiled
HANGZHOU, China and GOTHENBURG, Sweden, Aug. 2 -- Zhejiang Geely Holding Group Co., Ltd. ("Geely Holding Group"), one of the fastest-growing car manufacturers in China, today announced it has completed the acquisition of 100 per cent of Volvo Car Corporation ("Volvo Cars") from Ford Motor Company.
Geely also announced that Stefan Jacoby, the Chief Executive of Volkswagen Group of America, would become President and Chief Executive Officer of Volvo Cars.
Li Shufu said: "This is a historic day for Geely, which is extremely proud to have acquired Volvo Cars. This famous Swedish premium brand will remain true to its core values of safety, quality, environmental care and modern Scandinavian design as it strengthens the existing European and North American markets and expands its presence in China and other emerging markets."
Stefan Jacoby, the new President and Chief Executive of Volvo Cars, said: "I am honoured to join a company with the prestige and growth potential of Volvo. Our employees, suppliers, dealers -- and above all our customers -- can be confident that Volvo will preserve its special status as the industry leader in vehicle safety and innovation -- even as it pursues new market opportunities."
Following completion of the transaction, Mr. Stefan Jacoby will join the board of Volvo Cars, chaired by Li Shufu, Chairman of Geely Holding Group. The board will comprise several new directors including Hans-Olov Olsson, a former President and Chief Executive of Volvo Cars and a former Chief Marketing Officer of Ford, who will become Vice-Chairman of the board.
As announced on the signing of the stock purchase agreement on 28th March, 2010 Geely has agreed to pay USD 1.8 billion for Volvo Cars, which included a USD 200 million note with the balance paid in cash.
Geely issued the note and paid USD 1.3 billion in cash for Volvo Cars, utilising financing from Chinese institutions and its own balance sheet as well as international capital market resources. The closing consideration reflects adjustments in areas such as pension obligations and working capital.
Under the new ownership, Volvo Cars will retain its headquarters and manufacturing presence in Sweden and Belgium; and its management will have the autonomy to execute on its business plan under the strategic direction of the board.
As part of the transaction, Volvo and Ford will maintain close component and supply relationships, ensuring continuity in areas where they provide supply to each other.
Completion of the acquisition, which follows more than a year of talks between Geely and Ford, was marked at a signing ceremony in London attended by Li Shufu and Lewis Booth, Chief Financial Officer at Ford.
Mr. Li thanked Ford and the Volvo Cars management for their support during the transaction negotiations, and also paid tribute to union and government officials with whom Geely built close contacts.
"The signing and completion of this acquisition reflects the commitment of Ford and Volvo executives to the future of this company, along with the vital input of labour representatives and government officials in Sweden, Belgium and China as well as other relevant countries," said Mr. Li.
The Geely Chairman added that Mr. Stefan Jacoby will succeed Stephen Odell as Volvo Cars' President and Chief Executive, taking up his role on 16th August, 2010.
Hans-Oskarsson, deputy Chief Financial Officer, will become acting CFO of Volvo Cars, replacing Stuart Rowley. Mr. Odell and Mr Rowley are moving to leadership roles at Ford of Europe.
Along with the new management team at Volvo Cars, Geely today named the full board of directors for the Swedish carmaker, comprising:
Li Shufu (Chairman)
Hans-Olov Olsson (Vice-Chairman)
Freeman H. Shen
Dr. Herbert Demel
Lone Fonss Schroder
Winnie Kin Wah Fok
The board -- which will include three labour representatives nominated by unions at Volvo Cars -- will assume its duties on completion of the transaction.
please save the propaganda. i doubt swedish workers are greater than chinese ones. just because people have been brain washed into thinking europe made cars are better does not actually mean they are. the point of a business is to maximise profits, not by giving hand outs to great swedish workers. also, i am sure if geely moves volvo operations to china, it will also get govt subsidies, furthering their economic advantages. theres a reason why volvo sold their firm in the first place. maybe because the current system isnt working, and the great swedish workers were not doing their job right. if geely continues the same great swedish path that volvo had then geely will end up having to sell volvo again. this time for $500 million.green car driver said:Not so fast, that would kill the brand! Many people buy Volvo cars in Europe, because they have a swedish feel, and because they're built in Sweden by great workers. A chinese Volvo might sell in China, but nobody would buy it in northern Europe.