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Olofsson happy with Geely Volvo assurances

Olofsson happy with Geely Volvo assurances

Published: 21 May 2010 10:47 GMT+02:00
Updated: 21 May 2010 10:47 GMT+02:00

Sweden's enterprise minister Maud Olofsson has discussed the Volvo-Geely deal with senior Chinese management and received confirmation that the firm plans to retain its Swedish connection and maintain production in the country.

Olofsson is in China with a high level Swedish delegation including senior business leaders and King Carl XVI Gustaf, and met the influential National Development and Reform Commission (NDRC) in Beijing to speak about the Volvo-Geely deal.

"They think that Geely should make major investments in Sweden and there is nothing to suggest that they are going to move everything to China, nothing - in fact they underlined that the brand is strong due to its links to Sweden," Olofsson told news agency TT in Beijing.

Olofsson underlined the Swedish government's position to the NDRC that it is expected that research and production would remain in Sweden even after Geely's purchase of Volvo is completed in the autumn. She underlined that she had informed Geely about Swedish law and the role of the trade unions.

"I have been given the impression that they are very conscious that this is going to be a positive deal and that Geely acts in a decent way in Sweden," Olofsson said.

China is the world's largest car market with 10.9 million cars sold in the country in 2009, up 53 percent on the previous year.

The Chinese car market is expected to expand by 15-17 percent in 2010. Volvo already manufactures its S40 and extended version of the S80 in China but in order to penetrate the market further, production in China needs to increase. According to recent reports Geely plans to build a new Volvo factory in Chongqing, near Beijing - or in western China.

Olofsson explained that she was unable to comment on the proposed plans.

"This is something that the firm has to answer. But I have said all along that if we are to reach out to the Chinese market then cars also need to be produced in China," she said.

TT/The Local (news@thelocal.se)

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Your comments about this article

13:27 May 21, 2010 by calebian22
"production in China needs to increase."

That is all anyone needs to focus on in this story. Everything else is smoke and mirrors.
15:22 May 21, 2010 by bocale1
"Olofsson explained that she was unable to comment on the proposed plans"... still need to see what she is able to comment about...
15:39 May 21, 2010 by bjinger
Absolutely Volvo needs a change! If Volvo acts as it did under the rule of Swedes and American, I see no future for Volvo.

People have to keep in mind that the investers will not and never give up any strategies to make their business grow and profit. What are the commentators above worried about? the employment or what? so work hard and smart for the new change!
17:24 May 21, 2010 by calebian22
Bjinger,

It is hard to work hard and smart if your job has been eliminated because Geely can hire 5 Chinese workers in China for the price of 1 worker in Sweden. As you said, no investor will eliminate an option to grow and profit. Profit margins are what drives a company's bottom line and not loyalty to country and brand combinations. Volvo manufacturing in Sweden is in the twilight of it's existence. Just wait and see.
19:22 May 21, 2010 by 2394040
As we all know, you can "always" trust another person's word.
21:05 May 21, 2010 by 3rdjerseyman
China is all for China. 19th century style nationalism has replaced the official but defunct Marxism of the revolution. Like the Islamists the Chinese justify any and all lies and deceptions practiced against foreigners as allowable in pursuit of the greater good of Chinese national supremacy.

Volvo will be exceptionally succesful in China. Volvo in Sweden will serve as a conduit for high-tech engineering into Chinese industrial and military power. You can kiss your high end manufacturing jobs good bye. It may take five to ten years, but it is over.

Politics trumps economics. Germany and Britain were each other's number one trading partners, but still tore each other to shreds in war. Similarly, China will push the US too far. War over control of the Pacific will ensue. Even if the combat does not go nuclear, the internation trade regime will be shattered.

Too bad for everyone. Human beings are only imperfectly rational.
00:04 May 22, 2010 by Luke35711
I am worried too. If one studies Tao te Ching and the Art of War, what emerges is an ultra-competitive, patient, and very focused mindset. This is very different to the culture-rich (but a bit disorganised) mindset which was produced by Enlightenment. Europe and America should learn to respect Chinese work ethics (which is exceptionally strong), but China should also respect our fondness for working by creating and appreciating culture and ideas. This really is the key issue for the next 10-20 years. Both sides can enrich each other, but so far nobody seems to really have found the way, the way to simply work together, and enjoy this, enjoy each other company.
04:25 May 22, 2010 by 3rdjerseyman
The sad part- and again the English/German comparison applies- we ( Americans) really do like the Chinese. There are certainly millions of Chinese-American families now, but there is also a long legacy of American missionary and charitable involvement in China.

I think China today has somewhat the psychology of late 19th century Germany. Germany felt that it had been denied its "place in the sun" by the machinations of Britain and France. China feels as though she had been exploited and oppressed by foreigners since the Opium Wars and is now regaining her place as the Middle kingdom- the center of civilization.
18:05 May 22, 2010 by Luke35711
Yep, comparison with pre-WW2 Germany is definitely relevant but hopefully not complete. Double irony for Sweden, in any case. Still, Prussian-Germany was a European culture, there might be an additional cultural barrier here. I can see how the focus on here and now, constant reinvention of ideals, ideologies, fashion crazes, tendency for individual political posturing, all this might appear childish or even malicious to an external observer, certainly not likable. How many people do know about opium wars and opium trade? Certainly, nothing to be proud of. And yeah, at the end of the day, it is the individual consumer who makes the purchasing decision, and he or she is free to buy goods from any country they want. So the hypocrisy is plainly demonstrated by trade numbers.

It's nothing short of astonishing that China modernised in 30 years, instead of 300. My view is that both civilizations could learn plenty from each other. The commitment for peace has to be total.
00:22 May 23, 2010 by marbund1
A Chinese company bought British Leyland, or at least what was left of it. Took the design of the Mini to China and closed the UK manufacturing plants. And you still trust them?

Hey, the jibe about England and Germany tearing each other apart is a little cheap. England and the US tore Germany apart because someone in Germany decided that the best place for ethnic minorities was in a gas chamber. Have they changed the history coriculum in Sweden as well to only include the "acceptable" past?

Maybe China is just getting back at European nations because of the opium wars. Hasn't anyone told the Chinese government yet that we handed back Hong Kong in the last century.
02:05 May 23, 2010 by volvoman9
Look at the photo, he's checkin' out Maud's ass. Somethings never change regardless of where you live.
10:20 May 23, 2010 by Keith #5083
If Volvo management and workforce in Sweden cannot compete satisfactorily in Europe then that is the end of Volvo. It doesn't matter much who owns it!

There is no hard evidence that Geely, a rather amazing company by chinese standards, will behave in some of the pessimistic ways predicted here.

Even if they did - did Swedes want to buy Volvo? Nope!

Li Shufu managed to turn a couple of thousand $ in the 80's into the first independent and largest private automobile manufacture in China. Maybe if Volvo is willing to take the ride with this remarkable man, it just might turn out to be something better than the predictions of doom and gloom that so many seem to enjoy.
19:09 May 23, 2010 by Luke35711
It is true that some workers here, sometimes, seem to resist work, in ways which seem... such hard work! Some of the schemes are really pathetic and rather sad, also on personal level. There is definitely something psychological going on. Such people are in absolute minority, very few, but can be quite disruptive in a culture that relies on consensus.
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