Ford Tabs China's Geely Motors as Preferred Bidder for Volvo

By Editors on October 30, 2009 6:58 AM

Although the next owner of Volvo Cars remains an open question, Ford has now formally gone on record as bestowing "preferred bidder" status on a consortium led by China's Zhejiang Geely Group Holding Co. Ltd. in the ongoing discussions regarding acquisition of the Swedish automaker. Lewis Booth, Ford Motor Company's executive vice president and chief financial officer stated: "Ford believes Geely has the potential to be a responsible future owner of Volvo and to take the business forward while preserving its core values and the independence of the Swedish brand. But there is much work that needs to be completed in the more substantive discussions that are agreed to take place." He went on to point out that the two firms have "no specific timeline to conclude the discussions," which could only be finalized after Ford was satisfied that Volvo would end up with "the resources, including the capital investment, necessary to further strengthen the business and build its global franchise, while enabling Ford to continue to focus on and implement our core ONE Ford strategy."

Regardless of how these or any other negotiations ultimately play out, Ford does not intend to retain any actual equity position in Volvo. However, John Fleming, chairman of Ford of Europe and Volvo Cars, further touched on that sensitive area, noting that in addition to recognizing the iconic nature of the Volvo brand and its custodial responsibilities to the employees, local community and key stakeholders: "Any sale also would need to take into account the significant connections between Ford and Volvo in terms of continuing component supply, engineering and manufacturing."

Volvo CEO, Stephen Odell, indicated that the management team at his company also welcomed the announcement as a positive step forward. "At Volvo, we are continuing to keep our attention firmly fixed on engineering and building great Volvo cars, to reduce our cost base and to return the business to sustainable profitability at the earliest possible opportunity.