Ford’s Sale Of Volvo To Geely Is Expected To Close Next Week

March 10th, 2010

We have not heard much lately about the sale of Ford’s Volvo to the Chinese automaker Geely. We are hoping things were on track, but given all the problems GM had offloading to Sichuan Tengzhong Hummer – namely financing, approval of the Chinese government, and Ford’s concern over intellectual property – we were not exactly our company breath. However, word is now filtering out that the sale is not only still on, but it is expected to close next week.

Citing two people “familiar with the plans,” Automotive News says that Ford will Zhejiang Geely Holding Co. hand the keys of Volvo in the next few days. Geely will pay 1.8 billion U.S. dollars for the privilege of acquiring the brand – a fraction of the $ 6,450,000,000 spent on acquiring Ford’s Volvo in 1999.

Unlike the Scandinavian cousin, Saab, Volvo has a (potentially) profitable brand in the Ford lineup. In fact, Volvo recently announced a profit before tax of $ 53 million Q2. Despite its potential to become a cash cow, Volvo does not fit Ford CEO Alan Mulally’s ‘One Ford’ vision of honing its focus on its core product lines. That is at least partially responsible for the sale of Aston Martin and Mulally Jaguar Land Rover, and the recent shuttering of Mercury.

Volvo fans have mixed feelings about the sale. On the one hand, many complained that Ford’s Volvo creativity and expansion over the past decade bud. On the other, nobody really knows what to expect from Geely – although we think it is encouraging that Geely is Volvo’s industrial base in Europe to keep. (Less encouraging: Geely promise to “liberate this tiger.”)

So what’s better the devil you know or do not?

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