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Geely comments raise doubts over Volvo buy

TT/The Local · 13 Apr 2010, 15:10

Published: 13 Apr 2010 15:10 GMT+02:00

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When Zhejiang Geely Holding Group signed a contract in late March with Ford to buy Volvo Cars, Geely president and shareholder Li Shufu underlined that Volvo would become an independent company within the group.

Geely's produces cars through its Geely Automobile subsidiary, which is 51 percent controlled by Li Shufu. The rest of the shares are listed on the Hong Kong stock exchange. Shufu's comments have hitherto indicated that the two firms should be siblings within the the group.

But when Geely Automobile presented its accounts for 2009 at a press conference in Hong Kong on Tuesday, the car company's CEO Gui Shengyue painted a different picture. According to Shengyue, Geely's parent company plans to incorporate Volvo Cars into Geely Automobile.

"It will definitely not take a long time. Maybe three years," Shengyue said according to Sveriges Radio's Ekot news programme.

This is not the first time that Geely representatives have made apparently conflicting comments and unions have demanded an explanation.

"It makes me wonder. They do not seem to be working together within Geely," said union representative Magnus Sundemo.

Sundemo has now forwarded a question to one of Geely's representatives seeking clarification over the issue.

"They must of course clarify this so that we understand how they work. Internal communication does not seem to be their strong suit," said Sundemo.

Story continues below…

Geely Holdings Swedish spokesman Anders Fogel considers that Shengyue's statements may be an expression of his own personal dreams. The parent company has no plans to merge the two companies into one car making company, Fogel told Ekot.

"The plan remains to run Volvo as an independent, stand-alone company directly under the parent company," said Fogel to news agency TT.

Fogel has joined the unions in asking for an explanation over how Shengyue views the takeover of Volvo.

TT/The Local (news@thelocal.se)

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Your comments about this article

16:46 April 13, 2010 by RadioBob
Is *anybody* surprised by this?
19:40 April 13, 2010 by spy
Didn't take long for the savages to show an indication of their true colors. Poor Volvo.
19:41 April 13, 2010 by Lea
Gee, the next news item would probably be: "Russian mobsters, who own SAAB, want to close it down" :)
19:45 April 13, 2010 by spy
Or Volvo savaged by dog eaters.
20:27 April 13, 2010 by John D.
Remember when everyone complained about the American companies owning Volvo and Saab? Remember the Gangster Motors comments?

Well, now there will definately be somthing to complain about. The Auto Industry will be gone here completely in probably less than 5 years. Which means the supplier base will also.

Now there are real Gangsters running Saab and Volvo. How can people that manipulate thier currency be trusted?

Not surprised, but then again Big Business is Ruthless and only the strong survive.
21:07 April 13, 2010 by jack sprat
No surprise at all.

Fairly obvious from the word go,despite the phoney promises which only a fool would have believed,both with regard to Volvo and Saab.

No doubt the famous marques will survive,...but within five years the Swedish input and income from them will be virtually zilch.

As john says big biz is ruthless and no way will the Chinese and Ruskies intend to pay Swedish labour rates and overheads.

Fika anyone?
22:06 April 13, 2010 by Dont_want_to _be_a_swede_anymore
No, no suprise at all....

I sometimes wonder how naive most of us swedes are, including businessmen,....or maybe swedes are just more stupid than most, although we believe we are so clever!

I so tired of this, diskutera this, diskutera that and then add to that all this gender stuff...business is business...whether you are from the west or east, a man or a woman....business is all about maximising profit according to how you define it.

We swedes must grow up and realize thet there is a world outside our borders and that our way isn't always the best way!

Will yo all join me in the movement: Grow up Sweden!

I'm happy to have a fika with you Jack Sprat, so that we can discuss this and agree on something completely inefficient!
00:07 April 14, 2010 by Marvino
I hope somebody at FORD is paying attention to the comments of Gui Sengyue. It is obvious that all the promises made by Shufu in Sweden don't hold water. Some of the highly debated intelectual properties negociated by FORD, will be just "a piece of paper" once Volvo becomes a Chinese company. FORD's Board may not care too much, because all they want is to "see the money NOW" . It obviously has not occured to them that by selling Volvo, they are selling to the Chiese the very rope they are going to be hanged with in the near future....
00:12 April 14, 2010 by 2394040
It is difficult to say what will happen, but one fact is certain. In dealing with China, Sweden is dealing with a nation that, since the beginning of human history, has never embraced all of the types of freedom. There are in fact three types of freedom: national, political, and personal. National freedom is the right of a nation to be free of foreign interference. Politicial freedom is the right of people to select those persons who will manage the affairs of a nation. Personal freedom is the right of an individual to live as they choose, so long as they don't harm others. China only believes in national freedom; buy only for itself. It has no problem with interferring in the affairs of other nations. You can completely forget about political and personal freedom where China is concerned. So if China should go back on its word where Volvo is concerned, don't be overly surprised. That is the nature of a totalitarian nation.
02:08 April 14, 2010 by bhgtiger
Why Ford is just Ford but Geely represent whole China? I guess that's because you know too little about this country. I think for any business man, this is a good deal: one with technique one with market. So just give it sometime to see if it works.

And I think too many people just wish to see Volvo fall and blame Geely or China. Otherwise this can not be a news and receive comments.

I think most people in Sweden are well educated.So, Don't Ever Follow What the Media Says, they just want to make a sale.

In a big picture, no matter what the end is, this deal gives both Volvo and Geely a chance to success, this is why it is a good deal. The fate of Volvo is not hold by Chinese.
02:22 April 14, 2010 by repat_xpat
When I was working with SAAB last year, one of the suppliers I was working with said that they would love to be a fly on the wall while SAAB tried to pull some of the crap they pulled use with the on the Chinese. Now they have one better, the Russians. The bloggers above are wrong. It will take 20 years, not 5 for the Chinese and Russians to rob Sweden of its car industry. But it will happen. There is also the perception they have to sell that SAAB and Volvo are "quality Swedish" cars. In 20 years that will have passed too.

Jack Spat is totally right: Fika, the Swedish work ethic, will kill both SAAB and Volvo.

@Bhgtiger: Your too blinded by optimism. You are correct that Sweden is well educated. But that is changing, just ask my son how is repeating a grade in American school because the finest Swedish schools didn't offer the basics of the lowest American education.
04:33 April 14, 2010 by Ghostrider
Volvo sold out. Saab sold out. Poor, poor Sweden.
15:17 April 14, 2010 by luckyluckyme
Which one is the nest? Ericcson? Or Electrolux?

Poor, poor Sweden.
16:49 April 14, 2010 by calebian22

It goes all the way up. My friend in Stockholm studied to be a legitimerad sjuksköterska, 4 years of university. He has to spend a year studying in the US, to reach RN status, because of the medical lite curriculum now that he has returned to the States.
04:18 April 15, 2010 by volvoman9
I'm ordering a new C30 this week. Hope it's not the last one.
10:06 April 15, 2010 by blursd
Honestly can anyone really say they aren't surprised ...? China is notorious for making agreements, and then completely disregarding said agreements as soon as they get what they want.

Selling Volvo to Geely is idiotic ...
15:13 April 16, 2010 by rumcajs
I'm originaly from Colombia and as the owner of the company I work from or the company I buy things from.... I trust more a gangster than a Chinese bussiness man. Have some Chinese friends and they are realy cool guys, so no racism, but Chinese bussiness men (or women) are colder and more focused on money over anything else than the ones we are used to. I hope VERY MUCH that this will be an exeption and Volvo keeps being what it is.
21:19 April 16, 2010 by GSmiley
I cannot see how anyone can trust the Chinese. Have they EVER ONCE been good for their word?

That aside, to those who say the Swedish car industry is doomed, don't look now, but it is almost dead already: All this stupid Spyker deal does for SAAB (yes, I like the old spelling. Sorry!) is postpone the inevitable. Someone should have given a "Do Not Resuscitate" order long ago. It does, however, buy those employees some time to look for work!

As for Volvo, it makes me cry. The government should be summarily thrown out of office for allowing one of Sweden's few remaining industrial "Crown Jewels" slip out of Scandinavian hands. Shame. You will deserve the same fiscal servitude that has befallen Great Brittan. Sweden soon too will become a "service economy."
22:55 April 16, 2010 by Alasdair MacCorquodale
I cannot for the life of me understand why Sweden has permitted Volvo and SAAB to slip into foreign control. Do not allow your current level of prosperity to blind you of your slipping down the slope of economic decline. Are you happy to be on a suicidal path of economic decline?

China and India are experiencing high economic growth. And Good Luck to them. But that growth has been achieved in a big way by our giving them access to our Western markets.

the long and the short of it is that these two countries are getting into the position of being able to buy up major parts of our economies.

I applaud poster #9's comment.
18:15 April 17, 2010 by harrylatour
Funny we aint having this 'blogging session about Renault (France) they also own Nissan you know! Maybe the French are more than just wine and food after all and their national pride IS worth something!!
20:38 April 20, 2010 by Coalbanks
Right on # 9 & # 20! China & India are becoming the big producer/consumer block in place of EU/USA. We need a new economic plan for EU & North America to prevent a terrible long slide into poverty & anarchy.... ooops! A bit late, perhaps?
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