Ford agrees to sell Volvo to Geely
Ford agrees to sell Volvo to Geely
Ford has agreed the terms of the sale of its Swedish business, Volvo Cars, to China's Geely.
Ford said "some work still remains to be completed" but the deal will be finalised early next year ahead of completion soon after Easter.
Ford put Volvo up for sale a year ago to help pay off its debt and make its business more focused.
Geely was named preferred bidder in November. If completed, it will be the largest purchase by a Chinese car firm.
Ford said that while the "substantive commercial terms" had been settled, financing still needed to be completed and government approval was also necessary.
The update on the sale is necessary for Geely to apply for government approval of the deal and with it, it is thought, the firm's financial backing.
No details were given of how much the deal is worth, but it is widely rumoured that Geely will pay Ford $2bn (£1.2bn; 1.4bn euros), less than a third of the $6.45bn Ford paid for Volvo in 1999.
Ford said it expects to continue co-operating with Volvo Cars, but did not intend to retain a shareholding in the business after the sale.
Industry observers say the sale is good news for Volvo.
"In theory, the Chinese market could be an opportunity for Volvo," Nomura's auto specialist Michael Tyndall said.
"It's a well-known brand, has a good heritage and a range of products that should appeal to the Chinese consumer."
Equally, the deal should help Geely get into the Western market.
It is thought that the main sticking point in the talks between Ford and Geely had been disagreement about how to deal with intellectual property rights - setting the parameters of Geely's use of Volvo's technology, such as its famous safety equipment, and the extent and cost of using any technology needed from Ford's research.
Professor David Bailey from the Coventry Business School said that he expects much of the Volvo production to be moved to China, which recently overtook the US to become the world's largest market for cars.
"I would expect development and research to remain in Sweden, and maybe some production, but the big scale production will probably come from China," he said.
"In the long run the question is whether they can continue to develop Volvo's safety profile and advanced engineering technology" he added.
Geely said that Volvo would continue to lead the trend of world auto technology in safety and environmental protection.
"It will quickly increase its unique competitive status in the Chinese market," the firm added.
Ford said "some work still remains to be completed" but the deal will be finalised early next year ahead of completion soon after Easter.
Ford put Volvo up for sale a year ago to help pay off its debt and make its business more focused.
Geely was named preferred bidder in November. If completed, it will be the largest purchase by a Chinese car firm.
Ford said that while the "substantive commercial terms" had been settled, financing still needed to be completed and government approval was also necessary.
The update on the sale is necessary for Geely to apply for government approval of the deal and with it, it is thought, the firm's financial backing.
No details were given of how much the deal is worth, but it is widely rumoured that Geely will pay Ford $2bn (£1.2bn; 1.4bn euros), less than a third of the $6.45bn Ford paid for Volvo in 1999.
Ford said it expects to continue co-operating with Volvo Cars, but did not intend to retain a shareholding in the business after the sale.
Industry observers say the sale is good news for Volvo.
"In theory, the Chinese market could be an opportunity for Volvo," Nomura's auto specialist Michael Tyndall said.
"It's a well-known brand, has a good heritage and a range of products that should appeal to the Chinese consumer."
Equally, the deal should help Geely get into the Western market.
It is thought that the main sticking point in the talks between Ford and Geely had been disagreement about how to deal with intellectual property rights - setting the parameters of Geely's use of Volvo's technology, such as its famous safety equipment, and the extent and cost of using any technology needed from Ford's research.
Professor David Bailey from the Coventry Business School said that he expects much of the Volvo production to be moved to China, which recently overtook the US to become the world's largest market for cars.
"I would expect development and research to remain in Sweden, and maybe some production, but the big scale production will probably come from China," he said.
"In the long run the question is whether they can continue to develop Volvo's safety profile and advanced engineering technology" he added.
Geely said that Volvo would continue to lead the trend of world auto technology in safety and environmental protection.
"It will quickly increase its unique competitive status in the Chinese market," the firm added.
One reliable thing about the US, if somebody can make it cheaper, we are all to ready to jump on the bandwagon. Hell offer a Geely with Volvo levels of safety and refinement for 18k, watch South Korea disappear and Japan tremble in terror.
China has money.
They now have the planet's biggest car market... and with over a billion people where most all are still in poverty, it's obvious that as China gains more industry and more people rise out of poverty, that car market is only going to grow many, many, MANY times over.
They have every resource they need.
They own a large portion of the United States because instead of paying more taxes to fund what we need (at ZERO intrest), we instead sell China bonds and securities (and pay them intrest on top of what we borrow for letting us borrow from them... which we'll have to pay for anyway).
While we cheerlead those who ran our companies into the ground and go into delusional tirades about how our government is putting taxpayer money into our own car companies (and saving them) we whine and complain about how China steps in and buys up the assets and intellectual property.
China has nuclear weapons.
China has the world's largest army..... by far.
The only thing the US has over China is money. And that's being drained to China (as debt financing) and oil producing nations (as we send wealth to them to feed our oil habit).
We have technology. But China's using their wealth to buy that.
China has had veto power in the UN for decades, just like Russia and the US.
China can throw the United States of America into the wosrt economic crisis ever experienced in Western history by demanding and forcing payment of all debts owed to it from the US.
The reason they don't do it as leverage is so that we can keep buying thier goods and making them rich so they can buy technology and improve the lives of it's 1 billion citizens.
Well........ at least we have the lowest tax rates of any industrialized 1st world nation. China is only too happy to make those extremely low tax rates possible.
You said "BEFORE China becomes a new world power???
Wake up Rip Van Winkle.
They already are.
Last edited by guionM; Dec 24, 2009 at 08:42 AM.
The chinese government doesn't improse crash safety like the US or Europe.
...Or citizen's rights...
...Or workplace safety...
...Or Food safety...
...Or environmental protection...
Originally Posted by guionM
The reason they don't do it as leverage is so that we can keep buying thier goods and making them rich so they can buy technology and improve the lives of it's wealthy citizens.
Make no mistake - China is a terrifying superpower outright and getting wealthier by the second - but the government does not care about the vast majority of the citizens inside of their borders.
Crash safety is expensive, but they've reverse engineered pretty much every car out there. They know exactly how to do it if they want to, but like the BMW X5 clone from a few years ago, they just choose not to because it is more expensive that way. The government does not impose crash safety rules like we do, so they are not forced to. The problem is they could copy the Volvo cars, but the copyright infringement keeps them from being able to sell them outside of China where most countries care about trademarks and copyrights and intellectual property. Buying Volvo simply lets them sell globally - it does not give them access to any technology they havent stolen (or "bought") already.
The chinese government doesn't improse crash safety like the US or Europe.
...Or citizen's rights...
...Or workplace safety...
...Or Food safety...
...Or environmental protection...
Fixed that for ya.
Make no mistake - China is a terrifying superpower outright and getting wealthier by the second - but the government does not care about the vast majority of the citizens inside of their borders.
The chinese government doesn't improse crash safety like the US or Europe.
...Or citizen's rights...
...Or workplace safety...
...Or Food safety...
...Or environmental protection...
Fixed that for ya.
Make no mistake - China is a terrifying superpower outright and getting wealthier by the second - but the government does not care about the vast majority of the citizens inside of their borders.China doesn't need to.
I'll hit on a key area you missed in a moment.
I could go on a rant about China for hours, and how it's a threat to the US.
Al Queda is nothing more than a bunch of mass murderers. The REAL threat to the United States is (much the way Rome fell) having our economy controled from outside the United States by other countries.
Globalization is in itself an idea that is great for the United States.... as long as it stays competitive, has a solid economic system, and can control the costs of things within it's own boarders. Being in the forefront of technology and backed with a solid economy, we've proven over and over again that we can power the world.
The problem is that in the 1990s, we hit the perfect balence in taxes, spending, end economic stability. But since then, we drastically cut taxes while letting spending go unchecked for a decade (Congress abandoned Pay-Go over 8 years ago) which exploded the deficit giving China and other countries a chance to get rich (and influence) by filling in the gap for us. Health care costs ran wild until we have an unpleasent choice between mandatory (and expensive) health care program, or seeing the economy and potentially the US government collapse due to health care costs.
Our companies instead of doing business the old fashioned way (make better product, cover as wide of a market as possible to protect against downsturns, set money aside instead of using it to pay insane salaries and bonuses) gave way to "Right Now", "make instant profit and dividends by cutting labor", run product into the ground, and then get marketing to run it even more...instead of investing in new products, and "Golden Executive Parachutes".
In short, we did it to ourselves.
The problem isn't a bunch of crazies holed up in mountainous caves on the Afghanistan and Pakistan boarder who want to kill as many people as posible. Isreal is surrounded by hostile countries, has potential suicide bombers in their midst, and has the equvilent to walled off reservations that occasionally lobs a rocket propelled grenade or missle over the wall into a neighborhood. Last I heard, there are far more people up on compounds in Montana stockpiling guns and ammo looking to overthrow the government than there are radical Islamics looking to terroize us.
The problem is China reaching the point where it doesn't need our help, technology, industry, money (or even market place) anymore.
And that brings me back to the begining where I said there is a point you missed.
China has roughly 1/3 of the world's population. At that population number, with a very miniscule middle class (yes, they do have one) buying cars, China has become the world's largest car market.
China has changed in that it realizes that to gain economic strength, they need a much stronger middle class. Those that work in industry are by our standards, in poverty. By China standards, they are doing well. And they can buy cars.
China now is in the process of developing a industry that is focused on exporting because things that are sold to other countries makes the selling country richer.
China has at least 1.3 billion people. Even if 75% of the population remains in poverty, China will have a consumer based population that easily equals the US based population above the poverty line (something like 275-290 million). With no previous saturation, that makes the Chinese market easily outstripping the US.
If China were any other country, this whole thing would be a non issue. Sooner or later, you reach a wall due to either the population (the ability to consume), resources (money, people, or raw materials), or another country one-ups you.
China has a comparatively unlimited population and massive resources. As long as China can sell cheaply, it will have income. As long as they have income, they can keep buying technology and buy into other countries economies.
Stepping out of the crazy economic politics (which I fully agree with you by the way
) but yes, the government doesn't "need" to do a lot of things. The need to sell things cheaply requires cheap manufacturing facilities - something that (thanks to environmental laws and OSHA) we have a hard time with here in the US. Their rapidly expanding middle class easily will blow ours clear off the map with buying power -- as long as their government continues to ignore the problems of the lower class.
I find it laughable people insist China would go to war with us over nearly anything. They have nukes. So? They don't need to fire a single bullet or drop a single bomb. They will have a much quicker and easier time simply buying is out top to bottom and then blowing our economy out from under us.
) but yes, the government doesn't "need" to do a lot of things. The need to sell things cheaply requires cheap manufacturing facilities - something that (thanks to environmental laws and OSHA) we have a hard time with here in the US. Their rapidly expanding middle class easily will blow ours clear off the map with buying power -- as long as their government continues to ignore the problems of the lower class. I find it laughable people insist China would go to war with us over nearly anything. They have nukes. So? They don't need to fire a single bullet or drop a single bomb. They will have a much quicker and easier time simply buying is out top to bottom and then blowing our economy out from under us.
I guarantee you eleminate those agencies and that attitude would become the norm, not the exception.
Not because the majority of humanity is composed of inherently evil douchetards (okay thats debatable), but a job equals money and money equals secruity and when faced with being out on your **** starving in the cold, bad things that happen to people you barely know or the people you don't know are practically meaningless.
I find it laughable people insist China would go to war with us over nearly anything. They have nukes. So? They don't need to fire a single bullet or drop a single bomb. They will have a much quicker and easier time simply buying is out top to bottom and then blowing our economy out from under us.
Whack jobs working in the name of some god though? Yeah they'd be crazy enough to irradiate the US.
Not patting myself on the back. but I said versons of this a few years ago going round after round with a certain Nissan loving guy on this very same topic. I said China, Japan and asian pacific countries will control OUR COUNTRY if we do not stop what we are doing. His reply was as you all remember..to the words of.."you guys do not understand blah blah blah.." Yet its happening now..and its not good...
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