Ford to sell Volvo to Zhejiang Geely (China)

[Dr Mordrid]

Link....

Ford Motor Co.’s jumped 21 cents to $10.11 per share in morning trading on Wednesday after the company announced that it expects to complete the sale of Volvo Car Corp. to Chinese automaker Zhejiang Geely Holding Group Company Limited during the second quarter of 2010.

It is the first time since October, 3 2005 that Ford’s stock has traded above the $10 mark. The stock price increase came hours after both Ford and Geely said they have reached an agreement on all major commercial issues.

However, Ford said, “some work still remains to be completed before signing – including final documentation, financing and government approvals.”

Ford said it is working to structure the deal so that Volvo will receive the resources and capital investment needed to strengthen its business.

Geely said its talks with Ford have accelerated in recent weeks.

“Should a stock purchase agreement be finalized, Volvo will retain its leadership in safety and environmental technologies and will be uniquely-positioned as a world leading premium brand to exploit the fast growing China market,” Geely said.

Ford first said it would consider selling Volvo in December 2008 and named Geely as its preferred bidder in October.

For the first nine months of this year, Ford said, Volvo posted a pre-tax loss of $994 million compared with a loss of $787 million for the same period last year.

The sale of Volvo would complete Ford’s exit from its former portfolio of luxury brands, once called Premier Automotive Group, which was part of the vision of former Ford CEO Jacques Nasser. After Ford acquired Volvo it combined the Swedish brand with Aston Martin, Jaguar and Land Rover under that luxury group
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[Elie]

That is sad news for many many reasons!

[Kruzin]

That is sad news for many many reasons!

Not sad in that Ford is shedding off a money loser.
Volvos are solid cars, but obviously a drain on the company.
This is similar to GM dropping Saab.
If it ain't making $$, it's gotta go. The car buiz is not a charity.

Sad that another venerable name brand goes to China, and a once respected brand will now become a sub-par disposable POS.

[Elie]

I Actually agree with kruzin on the fact that a reputable company like Volvo going to china will result in cheap and disposable garbage.
Unless of course if china kept it's hand off Volvo and strictly provides it with the financial backing then I'm ok with that.

This is why I said it's sad news.

The other reason is that these companies have been around for many many years only to get closed down or trashed by GM. Money aside, if I were GM I would ensure that companies bidding to purchase these parts are able to continue building Volvo and others without severly impacting such a quality brand.
I believe Saabs sale to Spyker will be great if it goes through.