(Freeman H. Shen, Vice President, Zhejiang Geely Holding Group and member of the board, Volvo Cars.)
Ten months after being named a premiere bidder for Volvo, Zhejiang Geely Holding Group Co.,LTD has finalized the 100 percent purchase of the Swedish auto maker from Ford for $1.8 Billion. The deal signed in March, was a $200 million note with the balance to be paid in cash. Geely today paid $1.3 billion cash to Ford, but the final purchase price-- including customary market adjustments-- is expected to up the profits to Ford.
Details were slim, but Ford will continue, for a transition period, to supply Volvo with "powertrains, stampings and other vehicle components" according to the release. Ford will also help with engineering support, IT and tooling for the transition period. There are also special terms allowing for Volvo to govern the use of Volvo /Ford's intellectual property for both companies to "continue to deliver their business plans."
Ford purchased Volvo in 1999 for $6.4 billion.
breadwagon says:
07:20 AM, 08/ 2/10
When all is said and done, what was the overall total profit/loss with the $6.4 billion buy and ~$2 billion sale (adjusted for inflation) for Ford's venture with Volvo over the past 10 years?
e90_m3 says:
07:41 AM, 08/ 2/10
Volvo recently found its design muse with the new XC60 and S60. The former actually drives quite well and the latter, while I have yet to see in real life, seems to garner praise amongst reviewers.
Good luck to them. Make the new S80 look good and I may just get one.
ed124c says:
08:50 AM, 08/ 2/10
Wow! 6.4 Billlion in 1999? Those were certainly the good old days. Now, if Ford had put that money into FORD! they, in hindsight, would certainly be better off than they are today. (Maybe I should say: MORE better off.)
thejohnp says:
10:52 AM, 08/ 2/10
I imagine Ford got more than 6.4B from their use of Volvo engineering, platforms, safety technology, etc in the 10 years they were together. I don't think it was a much of a hit as the Land Rover and Jaguar deal. And this probably gives them good standing in China, which is shaping up to be the big sales market.
throwback says:
11:40 AM, 08/ 2/10
ed124c, that is why Mullaly insisted the company focus on the Ford brand. Without a strong Ford brand, the company may as well be Chrysler.
ed124c says:
12:26 PM, 08/ 2/10
@throwback: Yeah, but it was only after they had put the company into very deep debt, which they are still trying to get out of. I believe they will, given their product line, but I would imagine a lot of "goodies" went by the wayside due to costcutting.
For instance, we probably would have a Mustang with IRS by now.
And a much nicer Focus than the bland and boring box we have now.
brn says:
04:08 PM, 08/ 2/10
Sad.