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Swedish consortium enters battle for Volvo

TT/The Local · 15 Aug 2009, 09:34

Published: 15 Aug 2009 09:34 GMT+02:00

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The engineering trade union at Volvo Cars is reported to be behind the initiative due to provide opposition to the possibility of a Chinese owner, reported business daily Dagens Industri.

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).

Story continues below…

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.

TT/The Local (news@thelocal.se)

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Your comments about this article

10:56 August 15, 2009 by Leprehcaun
YAY! Finally! I thought the rich were going to let Volvo be sold to the Chinese. HA!
11:25 August 15, 2009 by skane refugee
This new 'offer' is backed by American financiers ...

... 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 ...
13:20 August 15, 2009 by Nemesis
This is potentially good news.

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.
17:47 August 15, 2009 by falcon
Koenigsegg doesn't make money selling their own products and they will rapidly kill the weak Saab. Now you want to add Volvo? Consortium? Hah! It's the same crowd than can't make a profit selling supercars. Smoke and mirrors!

An epic blunder.
19:14 August 15, 2009 by Greg in Canada
Bring back the old P1800 like Roger Moore drove in the "the Saint" and Volvo sales would quadruple. :-)
19:53 August 15, 2009 by Leprehcaun
I really really hope they won't sell to Geely.. what an embarrassment that would be.

Now does anyone understand these sorts of things? Can someone give their best guess at what the chances are that they will sell to the Swedish consortium? Too early to tell?

@ falcon

No it isn't the same group.. It's Volvo's.. ehm.. whatever vice direkör is in english.. the boss or whatever, the former one, handelsbanken, vattenfall and another company I don't remember the name of. Meaning not the same group.

That's at least what I got from expressen but I had to go before I could read the whole article so maybe I'm wrong.
20:20 August 15, 2009 by voidplay
Why would that be an embarrassment ? and for whom ?
20:50 August 15, 2009 by spy

Do you live in Wyoming?

If so I hope you are well.
22:25 August 15, 2009 by Marvino
I live in the USA, one of Volvo's largest markets. If you want to kill it, then sell Volvo to the Chinese. I really hope somebody in Sweden will read this comment and understand what is at stake.
23:26 August 15, 2009 by Nemesis

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.


100% right on that.
01:04 August 16, 2009 by volvoman9
As a long time Volvo owner and admirer I would agree that a sale to the Chinese would be an epic blunder. What is really at stake here is the intellectual value of the firm. Volvo has always led in sensible innovation and design with an austere but distinctively Scandinavian style. This along with the safety innovations made them a niche brand.

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.
07:39 August 16, 2009 by vento
Sweden is all for sale... much of the forest richness is alredy gone to Finland, many companies are now from Norway... Sweden is near to bankrupt. China is also buying some golf and touristic playground and Volvo will be quite surly chinese... that's the price for the swedish arrogance.
11:14 August 16, 2009 by Leprehcaun
@ Vento

What are you talking about? :O

Are you high or something? Sweden is still the world's ninth richest country per capita and we're recovering from the crisis in every way except for the job market which is still going quite bad. The unemployment rate here is as high as in the US. We are, haha, most certainly not about to go bankrupt. HAHAhAHA..

@ Marvino

That's the public opinion but we can't do anything; Ford is the owner and decides who to sell it to.
12:11 August 16, 2009 by Pacey
@leprehcaun: 9th richest with respect to percapita but what about in terms of innovation!! Name me some businesses I mean entrepreneurial ones which Swedes have launched dont give me copycats like Piratebay( Napster was the original one) etc.

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.
15:13 August 16, 2009 by Leprehcaun
I can't name anything like from from any country... What about spotify? Is there anything like that around?

We do own businesses.. Ever heard of IKEA, Ericsson, ABB or.. then there are probably only nationally famous companies.. well we own those at least. It is because of a few stupid greedy traitors that "we" sold Saab and Volvo to the US. They wanted to get rich fast.

Besides what we do best is to reinvent, with some modifications we have made the Germany's best tank the best in the world. xD (I am ofc joking (not about that being the best tank though)).

The Swedish state doesn't take it over because.. sigh.. the right wing is in power.. Now the left leads by 5% over them (in the polls).

Sweden is pretty good at innovation as far as I know. We patent a lot at least.. I don't remember all the statistics.. I look at too much statistics..
21:19 August 16, 2009 by usgepo

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!
21:26 August 16, 2009 by Quinault
I belong to a USA family that has driven Volvo cars for many years. We purchased our first one around 1961. My sister just bought the 20th. I have the 19th that I picked up at the factory in Sweden and have had three others.

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!
22:41 August 16, 2009 by randyt
I would agree wiht Nemesis in keeping Volvo as Swedish as possible. For sure keep it out of Chinese hands. I've mentioned this before, cars not made in China carry a heavy tariff when sold there. Chinese ownership will be a job killer for Volvo in Sweden.

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.
00:07 August 17, 2009 by Marvino
3:00 August 16, 2009


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...
00:19 August 17, 2009 by voidplay
"volvoman9" -- What was Tata's route ?

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.
01:06 August 17, 2009 by lingonberrie
Nemisis is exactly right in both of the comments posted.

Keep Volvo Swedish.

Get Ford out of Volvo entirely. Do not allow any American investors, and do not allow the Chinese to own any part of Volvo.

Sweden should go to Norway for financing, or Finland, or Denmark, or Nederland, or form their own totally Swedish group to deal with Swedes only.
01:20 August 17, 2009 by voidplay
To under estimate the chinese on Technology or research would foolhardy. Maybe once they are on par playing field they might be a lot more competitive. Any way it is a man eat man world, any second thoughts on Volvo just eating up money and staying fat ?
05:47 August 17, 2009 by skane refugee
SAAB auto and Volvo cars make losses ... even in boom years car buyers simply weren't prepared to pay premium prices in sufficient quantities to cost cover ... then the financial crisis hit

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
09:32 August 17, 2009 by Leprehcaun
@ Voidplay

It's not the Chinese or the Americans, it's the Swedes or the Chinese, but nice try.

That the "boss" of Volvo is terrified of a Chinese company buying Volvo should be enough to realize it's a bad idea (from our perspective) and we cannot afford to let them buy it.

Btw Americans wouldn't be the only ones who would stop buying Volvos if it was bought by them.. sales would drop dramatically and the standard employees currently have? HA! Forget it.
18:07 August 17, 2009 by rumcajs
I thought that Saab owned by Fiat would've been bad (thanks God it wasn't like that), but Volvo owned by the Chinese would really s..k. Have you seen the cars those guys make? The technology is like from the 50's and the quality even worse. It would be the end of the brand cos no1 I know would by a "Chinese Volvo". I have a baby and was thinking that if some day I buy a new car it would be a Volvo (for safety reasons), but if this desaster happens, I would go for another Mitsy or Mazda.... is Ford doesn't sell Mazda to the... dunno... Russians? They should have a bit of responsability sense and think about the future of the brand. Good luck to Jakob AB and Volvo. Nothing againts Chinese or Russians, it's just that their cars are.... well, you know.
21:38 August 17, 2009 by mkvgtired
@ Voidplay,

"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.
06:45 August 18, 2009 by volvoman9

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.
12:01 August 18, 2009 by Tobugrynbak
If the Chinese buy Volvo, it will cease to be a premium brand. No matter how hard the marketers will try to spin it. While it makes sense to the Chinese to buy Volvo to help leapfrog their level of technology in carmaking, it will just trash the brands credibility.

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?
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