Zhejiang Geely Holding Group signed a binding deal Sunday to buy Ford Motor Co.'s Volvo Cars unit for $1.8 billion, representing a coup for the Chinese automaker, which is aiming to expand in Europe.
The purchase gives Geely a European luxury car brand with a reputation for safety and quality at a time when China, which last year surpassed the United States as the world's largest car market, is eager to improve its competitiveness.
The price is far less than the $6.45 billion Ford paid for the Swedish automaker in 1999. The U.S. automaker has been trying to sell Volvo since late 2008 to focus its resources on managing its core Ford, Lincoln and Mercury brands.
Ford has committed to provide engineering support, information technology, access to tooling for common parts and certain other services for a transition period to smooth the separation.
Welcome to the global economy people. Come on how much longer is everyone going to cry that same song about things not being made in America? Volvo IS NOT an American Company. Ford is and owned them and made NO profit from the division. So Ford selling it off is a rather wise idea especially given the current economic crisis. Not to mention it allows Ford - yes a true American Company - to pay down debt and upgrade it's current vehicles. Now you can sure bet that Ford is keeping all of the technology from Volvo as they have with Mazda and incorporating it into their newer vehicles and that is well genius! Why keep a division or an interest in a company if you can just do it yourself after gathering the know-how yourself? If anyone takes an honest look at Ford's new product line you'll see not only innovative ideas but a better product than they've had in years. Their vehicles are already taking awards away from Toyota and several other car companies that were the top in their fields for years.
ReplyDeleteTo China I say good luck with Volvo. You have the people and well if only 1% of them buy a Volvo you'll sell more than were sold last year alone! To Ford I say GREAT idea. Pay down your debt and rise from the ashes and take over the American market share. The ONLY company that hasn't needed any of us to bail it out is certainly doing something right!