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Ford completes sale of Volvo to China's Geely

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Ford completes sale of Volvo to China's Geely

Paul McVeigh

Automotive News Europe -- August 2, 2010 07:46 CET

Ford Motor Co. said today it has completed the sale of Volvo Cars to China's Zhejiang Geely Holding Group for $1.8 billion.

Divesting Volvo completes Ford CEO Alan Mulally's strategy of exiting European luxury brands to focus on the core Ford brand, following the U.S. carmaker's 2007 sale of Aston Martin, and of Jaguar and Land Rover to India's Tata Motors Ltd. in 2008.

Ford paid $6.5 billion for Volvo in 1999.

“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,” Mulally said in a statement.

He added: “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 said agreements between Ford and Geely will allow both Volvo and Ford to establish "the proper use of each other's intellectual property."

The company said it 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 powertrains, stampings and other vehicle components.

The automaker will also provide engineering support, information technology, access to tooling for common components, and other selected services for a transition period.

VW's Jacoby to head Volvo

Geely said that Stefan Jacoby, CEO of Volkswagen Group of America, will be the new CEO of Volvo Cars. Stephen Odell, current Volvo CEO, is returning to Ford as chairman and CEO of Ford of Europe. Stuart Rowley, Volvo's finance head, is also returning to Ford as chief financial officer of Ford's European unit.

“Volvo is a proud company with a talented and dedicated team of employees,” Odell said in a statement. “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.”

Jacoby said: "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."

Booming auto sales in China made the nation the largest auto market last year, generating profit that's allowing its manufacturers to reach out to Western markets and technologies.

Geely's plan for Volvo includes using the Swedish nameplate to produce luxury brands in China, while maintaining its operations in Europe to supply the international market.

Volvo profit challenge

Geely, which only started making cars in 1986, faces a challenge to restore Volvo to long-term profits. Volvo Cars posted revenue of $12.4 billion in 2009 by selling 334,000 cars, but it recorded a pre-tax loss of $653 million.

The last time Volvo made an annual profit was in 2005, when it posted a pretax profit of $377 million. It has been profitable the first two quarters of this year, posting a pretax profit of $53 million in the second quarter, compared with a $237 million loss in the same period a year earlier.

“Geely is not necessarily stepping into a clear-sailing situation; the challenges aren't over for Volvo,” said Rebecca Lindland, an auto analyst for IHS Automotive based in Lexington, Massachusetts. “The Chinese business culture is very different than the Swedish business culture. A lot of this will depend on how they interact.”

But, despite China's dismal record at overseas M&A, Geely may be better equipped for success due to its experience working with foreign partners, including its acquisition of Australian gearbox maker Drivetrain Systems International and its tie-up with British cab maker Manganese Bronze, IHS Automotive analyst John Zeng told Reuters.

"Geely is not a beginner in global M&A like many people think," he said. "In China, Geely has established itself as a mass market carmaker, the acquisition of Volvo provides an opportunity to bring it to the next level."

Geely Chairman Li Shufu, who got his start in refrigerator parts and motorcycles and has since been dubbed China's Henry Ford, has already been named chairman of Volvo.

Chinese cities vie for Volvo plant

Geely's plans would see its new Volvo China plant nearly double its annual global production, with an aim to sell 150,000 Volvo cars in China annually by 2015.

Volvo builds its S40 and S80L models for the Chinese market at a factory co-owned by Ford and Chongqing Changan Automobile Co. Volvo will be able to use this plant even after Geely's takeover, but a number of Chinese cities, including Beijing, Shanghai and Chengdu, are courting Geely for a new Volvo manufacturing site. No decision has been made so far.

Geely has said it is prepared to pump up to $900 million in capital into Volvo on top of the $1.8 billion it is paying Ford for the carmaker.

Volvo sold 191,832 cars in the first half, 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.

Read more: http://www.autonews.com/article/20100802/ANE/308029922/1131#ixzz0vS1jcHw1

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Geely completes takeover of Volvo

Ola Kinnander and Keith Naughton / Bloomberg News

Zhejiang Geely Holding Group Co. completed the purchase of Volvo Cars from Ford Motor Co. in the biggest overseas acquisition by a Chinese automaker.

Geely paid $1.3 billion in cash today and issued a $200 million note for the acquisition, Ford said in a statement today. Geely will pay the remainder of the purchase price when the final adjustments on Volvos value are made later this year, Ford said.

Stefan Jacoby, who stepped down as head of Volkswagen AGs U.S. operations in June, will succeed Stephen Odell as Gothenburg, Sweden-based Volvo's new chief executive officer, Geely said in a separate statement.

Booming auto sales in China made the nation the largest auto market last year, generating profit that's allowing its manufacturers to reach out to Western markets and technologies. Divesting Volvo completes Ford CEO Alan Mulally's strategy of exiting European luxury lines to focus on its namesake brand.

"Demand for luxury cars in China is still growing rapidly, and it's important for Geely to build market share quickly," said John Zeng, a Shanghai-based analyst at IHS Global Insight. "The first priority for Geely would be to localize Volvo and make them in China, otherwise it would be difficult to compete with other luxury brands such as BMW, Mercedes and Audi."

Geely Chairman Li Shufu will lead the board of Volvo Cars, which will also include Hans-Olov Olsson, the Swedish carmaker's former CEO. Geely said Hans Oskarsson will replace Stuart Rowley as interim chief financial officer of Volvo Cars.

Geely first approached Ford about buying Volvo in mid-2008, two people familiar with the talks have said. Ford named Geely its "preferred bidder" in October 2009. The two companies agreed on the details of the transaction, including a purchase price of about $1.8 billion in March.

Continued Cooperation

The exact amount Geely pays in total will be determined later this year when the final adjustments on Gothenburg, Sweden-based Volvo's value are made, Ford said today.

Ford will continue to supply powertrains, stampings and some vehicle components to Volvo. It has also agreed to provide engineering and technology support, and access to tooling for common components.

Ford sold Aston Martin to a group of investors led by former U.K. rally champion David Richards for an undisclosed sum in 2007, followed by Jaguar and Land Rover to Tata Motors Ltd. for $2.4 billion a year later.

Odell, 55, a Ford veteran who joined Volvo in 2008, will become head of Ford's European business, succeeding John Fleming, 58, who will focus on leading global manufacturing and labor affairs, Ford said July 15.

Chinese Production

Having its own plant in China, which overtook the U.S. last year as the world's biggest auto market, will be key to Volvo's success in the future, Odell said in an interview July 29.

Volvo builds its S40 and S80L models for the Chinese market at a factory co-owned by Ford and Chongqing Changan Automobile Co. Volvo will be able to use this plant even after Geely's takeover, Odell said in the interview.

Volvo sold 191,832 cars in the first half, 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 years introduction of the S80L, a longer version of the S80 that's sold only in that market.

The last time Volvo made an annual profit was in 2005, when it posted a pretax profit of $377 million. It has been profitable the first two quarters of this year, posting a pretax profit of $53 million in the second quarter, compared with a $237 million loss in the same period a year earlier.

Ford ended three years of losses with net income of $2.7 billion in 2009 and was the only major U.S. automaker to avoid bankruptcy. Ford paid $6.5 billion for Volvo in 1999.

"Geely is not necessarily stepping into a clear-sailing situation; the challenges aren't over for Volvo," said Rebecca Lindland, an auto analyst for IHS Automotive based in Lexington, Massachusetts. "The Chinese business culture is very different than the Swedish business culture. A lot of this will depend on how they interact."

From The Detroit News: http://www.detnews.com/article/20100802/AUTO01/8020369/1148/auto01/Geely-completes-takeover-of-Volvo#ixzz0vSLE0tlp

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Ford's sale of Volvo to Geely a done deal

BY BRENT SNAVELY

FREE PRESS BUSINESS WRITER

Ford said today that it has completed the sale of its Volvo brand to Chinese automaker Geely for $1.8 billion.

The sale of the Swedish car brand completes the sale of all off the foreign brands that were once part of the company’s Premier Automotive Group and gives China’s fast-growing manufacturing industry a high-profile acquisition.

Ford had lost millions on Volvo since acquiring the Swedish automaker for $6.4 billion in 1999, and reported a pretax loss of $653 million on the brand in 2009.

“Volvo is an excellent brand with a strong product line, and it has returned to profits after a successful restructuring,” Ford President and CEO Alan Mulally said in a statement. “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.”

Since 2007, Ford has sold Aston Martin, Jaguar and Land Rover, and reduced its ownership stake in Mazda. In June, Ford said it would discontinue production of all Mercury vehicles by the end of the year.

The transaction also completes a process that began in late 2008 when Ford first said it would consider selling Volvo. Ford announced in March that it had reached a definitive agreement with Geely.

“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,” Ford CFO Lewis Booth said in a statement. “We wish Volvo’s management team, employees and new owners every success for the future.”

Geely plans to expand Volvo's presence in China and other emerging market while retaining its headquarters and manufacturing presence in Sweden and Belgium.

To help lead the way, Geely on Monday named Stefan Jacoby, the CEO of Volkswagen Group of America, as president and CEO Volvo Cars.

"This is a historic day for Geely, which is extremely proud to have acquired

Volvo Cars," Geely Chairman Li Shufu said. "This famous Swedish premium brand will remain true to its core values of safety, quality, environmental care and modern Scandinavian design."

link:

http://www.freep.com/article/20100802/BUSINESS01/100802005/1210/Sale-of-Volvo-to-Geely-a-done-deal

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Ford completes sale of Volvo to China's Geely

10:20 AM

CAPTIONBy Alexander F. Yuan, AP

Ford has finally shed itself of all its foreign brands, closing the sale of Volvo to Chinese automaker Geely for $1.8 billion.

Li Shufu is now chairman of Volvo. He's the founder and chairman of Geely, and started his career refrigerator and refrigerator parts manufacturing business, moving to the car industry in 1997.

The move to sell Volvo was part of CEO Alan Mulally's strategy to focus on Ford's core brand, the cars and trucks with the blue oval emblem. The automaker is also hanging on to Lincoln.

"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," Mulally said in a statement.

When Mulally took over Ford in 2006, the automaker had seven brands. At the end of this year, it will have just two. It sold Jaguar and Land Rover to Indian carmaker Tata Motors in June 2008 for $1.7 billion, and sold Aston Martin to a private group in 2007 for $931 million. This year, Ford said it would wind down the Mercury brand by the end of 2010.

Ford will keep working with Volvo in several areas to ensure a smooth transition. Ford is going to provide Volvo with powertrains, stampings and other vehicle components, and says they will provide engineering support, information technology, access to tooling for common components, and other selected services for some period of time.

The automakers have agreements on how to share intellectual property as well.

link:

http://content.usatoday.com/communities/driveon/post/2010/08/ford-completes-sale-of-volvo-to-chinas-geely-/1

China's Geely now owns Swedish carmaker Volvo

By Joe Mcdonald, AP Business Writer

BEIJING — Geely Holding Group completed its acquisition of Ford Motor Co.'s Volvo unit Monday in a $1.5 billion deal that gives the small but ambitious Chinese automaker a global brand and huge management challenges.

The legendary Swedish automaker is China's biggest foreign auto acquisition and an unusually large deal for a private Chinese company.

Industry analysts say 13-year-old Geely, barely known abroad, will face a struggle in integrating the two corporate cultures and turning around Volvo Cars, a perennial money-loser in a country with strong labor unions.

Geely agreed in March to buy Volvo from Ford (F), which sold its European brands to raise cash and focus on its core Ford and Lincoln units. Geely said it paid $1.3 billion in cash plus a $200 million note — less than the $1.8 billion price announced in March due to changes in pension obligations and working capital.

"This famous Swedish premium brand will remain true to its core values of safety, quality, environmental care and modern Scandinavian design," said Geely founder and chairman Li Shufu.

Beijing has been encouraging Chinese companies to expand abroad, taking advantage of the global economic crisis to acquire assets at lower prices. The biggest acquisitions to date have been by government companies in energy and mining.

Geely will face a long struggle reviving Volvo, said Zhang Xin, an industry analyst for Guotai Junan Securities in Beijing.

"Why would a company suddenly make money by simplying replacing a boss?" Zhang said. "I don't hold high expectations for Geely. They still have a long way to go."

Li said under Chinese ownership, Volvo will strengthen its presence in the U.S. and European markets and expand in China and other emerging markets.

Li said in March that Geely expected to spend up to $900 million to return Volvo to profitability. He said Volvo's biggest problem was high research and development costs while it produces far fewer vehicles than rivals Daimler and BMW.

Volvo will keep its headquarters and manufacturing presence in Sweden and Belgium and its board will have autonomy to execute its strategic plan, Geely said.

Privately owned Geely built a business selling cars, motorcycles and scooters with little government support.

The deal could give Geely an edge in China, which is the world's biggest auto market and one in which foreign brands often dominate. Volvo will also give the company a foothold in Europe.

Geely said the chief executive of Volkswagen's U.S. arm, Stefan Jacoby, has been named president and chief executive of Volvo Cars. He succeeds Stephen Odell.

Ford acquired Volvo in 1999 for $6.45 billion but has been trying to unload it since 2008 to raise cash and focus on its two remaining core brands.

Ford sold sold its Jaguar and Land Rover brands to India's Tata Motors in June 2008 for $1.7 billion, and it sold Aston Martin to a private equity group in 2007 for $931 million. Ford also plans to stop producing its Mercury brand by the end of this year.

Ford said last week that Volvo made $53 million in the second quarter, a $290 million improvement from the second quarter of 2009. Volvo sold 191,000 cars and SUVs in the first half of this year, up 29% from last year.

link:

http://www.usatoday.com/money/autos/2010-08-02-geely-volvo_N.htm

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China's Geely Completes Takeover of Volvo from Ford

MONDAY, AUGUST 02, 2010

Chinese carmaker Zhejiang Geely Holding Group Co. (simply known as Geely) completed the purchase of Volvo Cars from Ford Motor Co. on Monday. According to Ford, Geely paid $1.3 billion in cash today and issued a $200 million note for the acquisition of the Swedish carmaker. The exact amount of the final sale price will be announced later this year when the final adjustments on Volvo's value are made, and could 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."

Under the agreement, Ford will continue to cooperate with Volvo in several areas supplying powertrains, stampings and other vehicle components. It will also provide engineering support, information technology, access to tooling for common components, and other selected services for a transition period.

The Detroit automaker added that it has also come to an agreement with Geely on the use of intellectual property.

As previously announced, Stephen Odell, CEO of Volvo Car Corporation, will return to Ford as group vice president and Chairman and CEO of Ford Europe. Stuart Rowley, CFO of Volvo Cars, will also head back toFord as chief financial officer, Ford Europe.

"Volvo is a proud company with a talented and dedicated team of employees," said Odell. "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 has announced that Volkswagen's former U.S. Chief Stefan Jacoby will replace Odell and become CEO of Volvo Car starting from this month.

link:

http://carscoop.blogspot.com/2010/08/china-geely-completes-takeover-of-volvo.html

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Ford Completes Sale of Volvo to Geely; Jacoby Named CEO

By Ward’s Staff

WardsAuto.com, Aug 2, 2010 10:00 AM

Ford Motor Co. completes its sale of Volvo Car Corp. to China-based Zhejiang Geely today, receiving $1.8 billion for the Swedish auto maker, including a $200 million note and the balance in cash. Ford purchased Volvo in 1999 for $6.35 billion.

In a statement, Ford CEO Alan Mulally says the sale will allow the auto maker to “sharpen our focus on the Ford brand around the world.”

Since Mulally joined Ford in 2006, he methodically has sold or eliminated a number of divisions, including Jaguar, Land Rover and Aston Martin.

In June, Ford announced it was discontinuing its Mercury brand in the fourth-quarter, leaving only the Lincoln luxury marque and core Blue Oval brand in the auto maker’s portfolio.

Under terms of the agreement with Geely, Ford says it “will continue to cooperate with Volvo in several areas to ensure a smooth transition,” including providing “engineering support, information technology, access to common components and other selected services for a transition period.”

Agreements between Ford and Geely will allow both auto makers to deliver their business plans and establish the proper use of each other’s intellectual property, Ford says, without providing details.

Geely today also names former Volkswagen of America Inc. CEO Stefan Jacoby as new CEO of Volvo.

Prior to the completion of the sale, there have been a number of executive changes at both Ford and Volvo. Stephen Odell, former CEO of Volvo, is returning to Ford as group vice president and chairman and CEO of Ford of Europe.

Stuart Rowley, chief financial officer of Volvo, will take the same position at Ford of Europe.

link:

http://wardsauto.com/home/ford_volvo_jacoby_100802/

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Official: Ford Completes Sale Of Volvo To Geely

By Viknesh Vijayenthiran

Editor

August 2nd, 2010

It’s official. Ford (NYSE: F) has announced today that it has completed the sale of Volvo and its related assets to the Zhejiang Geely Holding Group Company Limited (Geely).

The total purchase price for Volvo and the assets set forth in an agreement signed back in March 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. So far, Geely has issued the note and paid around $1.3 billion in cash to complete the sale.

Under the terms of the sale, Ford will continue to cooperate with Volvo in several areas in order to ensure a smooth transition, but will not retain any ownership in the Volvo business. Ford will also continue to supply Volvo with powertrains, stampings and other vehicle components for an undisclosed period of time, as well as provide engineering support and access to information technology.

As for Volvo’s intellectual property, co-developed with Ford, the sale agreement will allow Volvo to grant sublicenses to certain portions of this intellectual property to third parties, including Geely. The list most likely includes Volvo’s array of radar-based safety features, PowerShift dual clutch technology and forced-induction powertrain knowledge.

Also as part of the deal, current Volvo chief Stephen Odell will return to the Blue Oval, as will current Volvo CFO Stuart Rowley. Odell will now head Ford’s European division, while Rowley will act as CFO.

Where the Geely deal will leave Volvo's future lineup is uncertain. The Swedish automaker recently unveiled its 2010 XC60 crossover and a refreshed C70 Convertible, and has the all-new 2011 S60 sedan to come later this year.

Sources close to the Geely have previously revealed that under Chinese ownership Volvo would launch two or three bigger and more luxurious models within the next four years to try and boost global sales, eventually hoping to reach the one million vehicle mark within five years. Volvo currently sells around 400,000 vehicles per year worldwide. Quite ambitious certainly, but with access to the lucrative Chinese market Geely could build and sell up to 200,000 vehicles per year for sale in China alone.

According to a previous report, Geely also hopes to start production of Volvo cars in a new factory in the Guangdong Province of China. Sources at Volvo have told TheCarConnection.com that a future relationship with China would leave Sweden as the center of product planning, marketing and some initial engineering. Geely's China-based engineers would execute mid-level engineering and manufacturing development at a savings of up to 30 percent from high-cost Sweden. Volvo would also produce a model in a Geely factory in China to expand the brand's global presence, but the goal would be to leverage Volvo's reputation and brand value, teamed with lower-cost Chinese engineering and manufacturing.

In a sad twist of fate for Ford, Volvo finally started to turn a profit after years of losses. In fact, the Swedish automaker had a pretax profit of $53 million in the second quarter, compared with a $237 million loss for the same period a year ago.

link:

http://www.thecarconnection.com/marty-blog/1040325_official-ford-completes-sale-of-volvo-to-geely

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OFFICIAL: FORD SELLS VOLVO TO CHINA’S GEELY

By Andrew Ganz

After entertaining various offers for months, Ford Motor Company announced this morning that it has completed the sale of its Swedish Volvo unit to a Zhejiang Geely Holding Group Company, the parent of Chinese automaker Geely, for $1.8 billion.

That final sales price includes a $200 million note, although it’s a far cry from the $6.5 billion Ford paid for Volvo just over a decade ago.

Ford was willing to take a massive loss on Volvo in an effort to streamline its operations to focus on its core global Ford division, as well as its upscale North American-only Lincoln brand.

“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 Ford President and CEO Alan Mulally in a statement released to the media. “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.”

Volvo’s two top positions – CEO Stephen Odell and CFO Stuart Rowley – will not make the transition to new ownership. Odell will take over as Ford of Europe’s CEO and Rowley will serve as the division’s CFO.

Former Volkswagen of America CEO Stephan Jacoby will take over as CEO of Volvo.

Making Volvo profitable

Volvo hasn’t posted an annual profit in half a decade, although the news has been much better so far in 2010. For the first two quarters of the year, it has reported small – but measurable – profits. That said, analysts are not necessarily optimistic that Volvo will immediately turn around and be profitable.

Geely has said that it will mostly leave the brand’s Swedish operations alone, although it does plan to open a Chinese factory to supply Volvos only for that market.

“Geely is not necessarily stepping into a clear-sailing situation; the challenges aren’t over for Volvo,” Rebecca Lindland, an auto analyst with IHS Automotive, told Automotive News. “The Chinese business culture is very different than the Swedish business culture. A lot of this will depend on how they interact.”

Currently, Volvo builds its S40 and a special long-wheelbase S80 called the S80L at a Ford joint partnership plant in China, but Geely has been shopping around with China’s largest cities in order to open its own Volvo plant. Geely has set relatively low goals of selling 150,000 new Volvos in China in just 5 years after it opens the plant. China is currently the automaker’s fourth largest market – last year’s S80L introduction helped boost sales 88 percent to 15,497.

A Chinese automaker?

Geely acquired one of the freshest lineups in the industry – its redesigned midsize S60 is set to bow in just weeks, while the XC60 and C30 are less than 18 months old in their current configurations. At least on paper, the new Chinese ownership seems content with status quo for Volvo’s global product lineup.

Volvo will remain headquartered in Sweden and will continue to operate its assembly plants in Sweden and Belgium.

“Its management will have the autonomy to execute on its business plan under the strategic direction of the board,” Geely said in a statement.

link:

http://www.leftlanenews.com/official-ford-sells-volvo-to-chinas-geely.html

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Ford completes sale of Volvo

Core values will remain, Geely says

STAFF AND NEWS SERVICES

Ford on Monday completed the sale of its Volvo brand to Chinese automaker Geely in a $1.8-billion deal, making it the largest foreign acquisition by a Chinese automaker.

Geely, which plans to invest up to $900 million in Volvo, says the brand will continue to focus on safety and quality. The deal could give Geely an edge in China, the world's biggest auto market and one in which foreign brands often dominate.

To help lead the way, Geely on Monday named Stefan Jacoby, the former CEO of Volkswagen Group of America, as president and CEO Volvo Cars.

"This is a historic day for Geely, which is extremely proud to have acquired Volvo Cars," Geely Chairman Li Shufu said.

"This famous Swedish premium brand will remain true to its core values of safety, quality, environmental care and modern Scandinavian design," he said.

Analysts say 13-year-old Geely, barely known abroad, will face a struggle in integrating the two corporate cultures and turning around the Swedish company, a perennial money-loser in a country with strong labor unions.

"Geely is not necessarily stepping into a clear-sailing situation; the challenges aren't over for Volvo," said Rebecca Lindland, an auto analyst for IHS Automotive based in Lexington, Mass.

"The Chinese business culture is very different than the Swedish business culture. A lot of this will depend on how they interact."

Geely plans to expand Volvo's presence in China and other emerging markets while retaining its headquarters and manufacturing presence in Sweden and Belgium.

The move completes the sale of the foreign brands that were once part of Ford's Premier Automotive Group.

Ford had lost millions on Volvo since acquiring the Swedish automaker for $6.4 billion in 1999 and reported a pretax loss of $653 million on the brand in 2009.

"The sale of Volvo will allow us to sharpen our focus on the Ford brand around the world," said Ford CEO Alan Mulally in a statement.

Since 2007, Ford has sold Aston Martin, Jaguar and Land Rover and reduced its ownership stake in Mazda.

The transaction also completes a process that began in late 2008 when Ford first said it would consider selling Volvo.

Ford announced in March that it had reached a definitive agreement with Geely.

link:

http://www.freep.com/article/20100803/BUSINESS01/8030382/1210/BUSINESS01/Ford-completes-sale-of-Volvo

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