Geely, Ford sign purchase agreement on Volvo Car

08:19, March 29, 2010      

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Chinese private carmaker Zhejiang-based Geely and American Automobile giant Ford Motor Company on Sunday signed an agreement on the purchase of the Swedish brand Volvo car in Gothenburg, the second largest city in Sweden, according to reports from Swedish media including SVT and SVD which has a live broadcast on its website.

The deal was done amid the visit of Chinese vice President Xi Jinping to Sweden.

Geely President Li Shufu and Ford's Financial chief Lewis Booth signed the agreement with the presence of Chinese Minister of Industry and Information, Li Yizhong, Swedish Deputy Prime Minister and Industry Minister Maud Olofsson and State Secretary Joran Hagglund , as well as Volvo Car Manager Stephan Odell.

Li Shufu said at the press conference that the deal is a milestone for Geely and Volvo. When being asked whether Geely will move the factory in Sweden to China , Li Shufu said no.

"Geely is Geely, Volvo is Volvo," Li stressed. "Volvo is like a tiger. Sweden and Belgium are its heart. We can't move the heart. But it's body belongs to the world. China's huge market will make Volvo really tap its potential," said Li.

Booth said he is satisfied with the deal and he is convinced that under the ownership of Geely, Volvo will have a good development.

With a deal of 1.8 billion US dollars, Geely not only bought the shareholding rights, but also all the copyrights of Volvo brand.

Swedish Union give its support to the deal

Swedish Union chairman Grenn Magnusson expressed that the union is positive about the deal, according to TT, Swedish News Agency.
"We were informed by Li Shufu just one hour and 40 minutes before we met the Ford people," he said.

The questions the union had was whether Geely has enough money to run Volvo, what is the future plan for expanding the business and developing new models. What is the research plan and so on.

After the talk, Magnusson was satisfied.

"We have got the information we have anticipated. We are satisfied now. From the union perspective, we are positive now, " said Magnusson.
"Now we can go ahead with the plan," Magnusson added.

Ford and Geely announced their intention of the purchase process in December 2009 with about 2 billion US dollars from Geely to Ford to buy out the whole plant and technology of Volvo.

Union had been worried about whether the plant will be moved to China, some suppliers worried whether the copyright will be respected and so on.
But after a delegation from Sweden to visit Geely in Zhejiang and the Chinese delegation came to Sweden, the clouds have been cleared and the questions have been answered. And the deal got goahead.

Ford bought Volvo in 1999 but wanted to sell out after ten years of losses.

Built in 1926 as a daughter company of SKF, Volvo car had about 22 thousand workers and produced 37.5 thousand cars in 2008.

Geely which was established in 1986 vows to turn the red into profit in 2011.

By Xuefei Chen, People's Daily Online correspondent in Stockholm. [email protected]
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