March 19, 2010
Swedish consortium enters battle for Volvo
Published: 15 Aug 09 09:34 CET
Online: http://www.thelocal.se/21482/20090815/
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A new consortium dominated by Swedish owners has at the last minute joined in the battle to purchase Volvo Cars from Ford Motors.
- Chinese firm close to Volvo Cars bid: report (6 Aug 09)
- China's Geely to buy Volvo Cars: report (18 Jun 09)
- EU approves Volvo loan guarantees (5 Jun 09)
Konsortium Jakob AB was listed at the Swedish Companies Registration Office (Bolagsverket) in July. Employees in Sweden and Belgium will have the chance to buy into the company with two monthly salaries. Volvo dealers will also reportedly to be offered the opportunity to buy in. AB Volvo, as well as an unnamed Swedish institutional investor, is also to have expressed interest in joining the consortium.
Roger Holtback, CEO of Volvo Cars from 1984-1991 and vice president of AB Volvo between 1990-1991, is reported to have sought American financiers.
Handelsbanken Markets has been cited as the consortium’s financial advisor.
The purchase price, since Ford will remain a minority owner, is estimated at approximately 15 billion kronor ($2.08 billion).
A consortium of the state-owned Chinese car manufacturer Geely is still believed to be the most likely candidate for the purchase. In June, Geely denied any plans to purchase Volvo Cars.
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... could be a genuine interest ...
... but could equally be Ford executives calling up their old business school buddies at private equity firms to make a 'rival bid' to give Ford the necessary deal leverage to force Geelys price up or to force Geely to close the deal quicker ...
However American investors will lead to the same problems that occurred before. ie. patent stripping, no long term planning, management over payment, training reductions, skill reductions, no real research and development, false promises and lurching from one disaster to another.
There really needs to be a Scandinavian or North European consortium put together for a long term investment to make this work.
As the present owners had to get money of the Swedish goverment and went back on promises to open a Malmo factory when they took over Volvo, the goverment technically has the right to take it of them and give it to the consortium of Koenigsegg Group on condition they keep the factories open and add it into there long term planning.
An epic blunder.
Do you live in Wyoming?
If so I hope you are well.
Koenigsegg Group are best known for there engineering expertise, research and concepts. The concepts they are developing and exploring, will put them in a central market position for the next generations of eco friendly and fuel efficient cars.
Koenigsegg Group can take on the big players head on, in the future car markets, if they get enough production capacity.
Your anti-Swedish nonsense is noted for what it is, jealousy against people who have got up of there ass's and tried to do something.
I for one admire Koenigsegg Group for standing up and trying to move forward. I wish them well and hope they suceed.
Marvino,
100% right on that.
The Chinese are logically trying to gain leverage and credibility by purchasing a respected brand. In addition the engineering genius that is Volvo will allow them a jump on the lucrative markets in America and Europe. Tata motors has used this same philosophy. The only way, I feel, to maintain the standard of excellence that Volvo stood for is to return it to the hands of the sensible and innovative Swedes that created it.
And I do live in Wyoming. No Volvo dealers here and imagine my surprise when I visited Sweden to find Volvo's so common there.
The unemployment rate in the US is high but still there is loads of enthusiam and entrepreneurial flair. I am not against swedes but I think you people should start owning businesses rather than working as labourers aka executives in companies.
The good thing about the US is even if we will go bankcrupt we will take the world with US!! What was an american problem is now a global one. That is what is thinking beyond the box...
Anywys I agree that Volvo shouldnt be sold to the Chinese Why doesnt the Swedish state takeover Volvo. You have bailed out banks then whats the harm in doing it . Run it along commercial lines get intelligent people onboard and then Volvo can conquer the world.
Koenigsegg's main share holders are dumping their shares, so who´s greedy and trying to get rich quick?
At the end the Swedish tax payers will end up holding the bag and paying for another failure!
I can firmly say that if Volvo sells to China we will all cease to be Volvo owners and drivers.
Volvo belongs to the Swedish people who have showed such innovation, common sense, and style through the years. To sell to China will be a huge, and I mean HUGE, financial blunder. They may gain a new market, but they will lose much of the stable market that has stayed with Volvo for many years.
USA Volvo Lover!
I was on a working trip to Stockholm, Kista, when Ford bought Volvo and my Swedish co-workers did not seem real happy! Can't blame them.
@leprehcaun
I do not agree with you. Ford does not give a hoot who the buyer is, but Sweden should. After all the car is a Swdish icon. I believe if sufficient capital is raised by locals, and a good offer is on the table, Ford would take it. I just fail to see any advantage Ford may have to prefer a chinese offer over a Swedish one, provided it fits the bill...
Why wouldn't Americans buy Volvo if it is sold to the Chinese?
Volvo is still Volvo it wouldn't have instructions in Chinese. Most big brands in most protected economies were all European (mostly british or American) people often paid large royalties for receiving next to nothing in return.
If their economic model is better it would be better for the chinese to run it. And from what I hear the Chinese take environmental issues far more seriously than the Americans.
Beggars can't be choosers ... default scenario in this climate is bankruptcy/reduction to spares suppliers/engineering consultancies/managing IP until patents expire
Neither GM nor Ford really care about avoiding this ... it's all down to the numbers ... how can they get out with minimum further financial damage
Swedish government, Volvo/SAAB workforces and their large number of Swedish suppliers however, do care
... hence taxpayer guarantees/de facto loans available for anyone prepared to take on SAAB ... same presumably for Volvo
Volvo trucks need to protect the shared brand and are probably being leaned on to provide financial support for Geely or any other buyer brave/foolish enough to go for Volvo
Swedish taxpayers will need to bribe purchasers ... and that's the sad truth
"from what I hear the Chinese take environmental issues far more seriously than the Americans. "
That is one of the most ridiculous statements I have ever heard. Please visit an American factory and then visit a Chinese factory.
The"route" of Tata motors was to purchase two premium British brands; Jag and Land Rover. They both enjoyed a respectable niche market in the U.S. but not enough to merit keeping them. Let's face it both Tata and Geely are from fledgling markets of scale. Their interest,I believe, is not so much about owning a premium brand as owning the intellectual capital and the expertise to improve their own brands. Have you bought anything mechanical from China lately? Have you dealt with Indian IT services? They are emerging nations but are still decades behind the west in technological achievement, and manufacturing quality. Pay attention to the lot of Jag and Land Rover as a Chinese Volvo will mirror this decline very closely. As to your comment on environmental issues; although I think American commitment is weak it is huge compared to China's. You could benefit from reading a bit more on this subject.
As someone who owns Volvo's and have seen the "quality" of Chinese mass production it bodes ill should the Chinese absorb Volvo.
Though it would have the effect of making existing Volvo's more valuable. Rather like what happened to MG/Rover cars.
Surely there could be some employee/management buyout with government surety?