Swedish Media: Volvo to go Chinese

The renowned Swedish auto brand Volvo's car division is well on its way to go the way of other prominent Western car brands such as Hummer, and end up in the hands of a Chinese company. According to Swedish daily Aftonbladet a deal between Volvo Car's recession-battered U.S. owner Ford Motors and Chinese automaker Geely has all but fallen into place and is now only awaiting the signatures of both parties.

According to Aftonbladet's sources Geely has offered 2.8 billion USD (around 14.6 billion DKK) for the Swedish car brand, and the deal is set to secure a whole lot of jobs in Volvo Car's European factories in Torslanda, Sweden and Gent, Belgium. A fact that comes as somewhat of a surprise to many who worried that a Chinese takeover would result in significant layoffs.

"Many people feared that Volvo in Gothenburg (the corporate headquarters, main R&D facility, etc.) would be closed down if the Chinese took over, but it looks like activity will actually increase", an anonymous source close to the negotiating table told Aftonbladet.

It seems to be Geely's plan to use part of the European Volvo factory facilities to manufacture low-cost Chinese cars for the European market; to be sold under the Geely brand and developed by the highly experienced Volvo staff in Gothenburg.

Even though jobs appear to have been secured for the foreseeable future, and activities are set to go up a notch in a company that has been struggling with declining sales for some time, resistance to the Geely takeover remains widespread among members of the Volvo management as well as among the general staff.

"All the Chinese car manufacturers have a poor reputation among the subcontractors, because they steal and copy patents and dump subcontractors without the slightest regret. And Geely is counted among the very worst", a representative of an investor group of Volvo employees that tried to buy the company themselves told the Swedish newspaper.

Full story in Danish

News category: Sweden