The politics of a recession, it seems, makes for strange bedfellows. Or exotic Asian ones, anyway. Today the Huffington Post reports that Ford is in talks with Geely Automobile Holdings Ltd. to buy Volvo, the last remnant of the once-promising Premiere Automotive Group. It is said Ford has also made overtures to Chery Automobile Co. and Chongqing Changan Automobile Co. in seeking to avoid the government loans that competitors GM and Chrysler have taken.
Geely MapleEnlarge Photo
The deal will likely yield Ford less than the $6.4 billion purchase price it shelled out for Volvo back in '99 according to one individual familiar with the proposed deal. But hoping to steer clear of federal funds that come with multiple conditions and negative public opinion, Ford might put price concerns aside.
This last step in disbanding the Premiere Automotive Group will be good for Ford, who can then worry less about Volvo's declining sales and focus more on its promising developments such as its gas/electric hybrid drivetrains and new generation of fuel-efficient EcoBoost engines. Ford has already offloaded the PAG's Jaguar to India's Tata Motors, as well as selling off Land Rover and Aston Martin.
Ford is the domestic automaker best poised to weather the auto sales downturn, and has recently enjoyed huge quality improvements and won accolades for its highly efficient 2010 Ford Fusion and Mercury Milan Hybrids.
[source: huffingtonpost via bloomberg]