Login to your account
Not a member? Register now.
AutoShopperBlog

Subscribe To The Blog:




Follow Us



The Latest News And Reviews
Throughout The Car Industry



Ford Sale of Volvo To Geely Final

Comments: Leave | View
On: Tue, Aug 3, 2010 at 9:52AM | By: John Welch


Ford Sale of Volvo To Geely Final

Having paid $6.5 Billion dollars for Volvo in 1999, one would think that FoMoCo would want to at least break even  . .. right? To US Automakers, getting rid of their European Luxo-Brands is breaking even. Just as GM lost its shirt on Saab, but is better without Saab, Ford is losing a truck-load of money on Volvo, yet doesn't seem to mind. Geely, coughing up $1.8 billion for Volvo, is saving $4.7 billion dollars. That certainly is a 'truck-load' of money.

“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,” Alan Mulally, Ford CEO, said in a statement.

“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.”

Where did all this restraint and responsible thinking come from? Oh yeah, Boeing. It's as if Bill Ford Jr. invited Gordon Ramsey to Dearborn for an episode of "AutoMaker Nightmares." To quote Ramsey: "How can you open seven restaurants when your first restaurant is failing?!" So true with any business; Mulally is simply finishing a plan he set in motion that would create a profitable Ford without the overhead and production baggage associated with EuroBrands like Jaguar, Land Rover (both gone to Tata in 2008), Aston-Martin (the press says AM was sold to Proton, but we all know David Richards owns all of Malaysia, as well as a large portion of Wales), and now Volvo. Ford will retain Stephen Odell, former Volvo CEO, who will return to Ford as CEO of Ford of Europe. This leaves the door open for Stefan Jacoby to step in as Volvo CEO.

Says Jacoby: "I am honored 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."

Volvo hasn't made a profit since 2005, something that has crippled the company’s ability to get new product to market. Geely and Jacoby have comprehensive strategies intended to fix this situation, some of which involve China itself. Volvo sold 191,832 cars in the first half of 2010, a 20 percent increase from a year earlier. In China, Volvo's fourth-biggest market, deliveries surged 88 percent to 15,497 cars in the period, helped by last year's introduction of the S80L, a longer version of the S80 that's sold only in that market.

Joining Jacoby as chairman of Geely will be Li Shufu, who got his start in refrigerator parts and motorcycles. This guy is so hot-to-trot he is being dubbed "The Chinese Henry Ford" . . . As Ramsey would say, "That smells like baby vomit!"

Officially, Geely owns Volvo, but Ford will continue to supply Volvo with parts, powertrains, and other components for the foreseeable future.


Photo Gallery (click a thumbnail to enlarge)


Comments

Be the first to leave a comment.


Leave A Commment

Allowed HTML tags: <a href=""> <abbr title=""> <b> <em> <i>
Please no link dropping, no keywords or domains as names; do not spam, and do not advertise! rel="nofollow" is in use

Captcha