Rumor: Volvo Talks Between Ford And Geely Hit A Speed Bump

October 21, 2009
2010 Volvo C30 R-Design

2010 Volvo C30 R-Design

A couple of weeks ago, we reported that Crown -- a consortium of American investors led by former auto industry executives -- is making a play for Volvo. The group's bid for the brand is substantially lower than that of current front-runner Geely, but we pointed out that the Americans do have some advantages at the bargaining table, especially when it comes to one of Ford's biggest concerns: intellectual property. China in general, and Geely in particular, aren't known for respecting IP rights, and as negotiations move forward, we suggested that could become a sticking point.

Apparently, it has become a sticking point.

Two sources close to the discussions between Ford and Geely say that things have come to a standstill, precisely because of IP concerns. Company representatives are meeting in London this week to continue the talks, but it appears as if the negotiations could soon be dead in the water -- as dead as Beijing Automotive Industry Holding Company's recent bid to buy Opel from GM, which failed due to similar problems. Geely's hand hasn't been helped by last week's arrests of Ford engineer Xiang Dong Yu, who's been charged with stealing thousands of documents from the company in his effort to land a job at Shanghai Automotive Industry Corporation; that's made Ford even more anxious about its IP, and heightened awareness of China as the source of such anxiety.

Although Ford hasn't commented officially on its discussions with Geely, company spokesman Mark Truby has indicated that Ford is still speaking to a variety of potential buyers. That sounds like good news for Crown -- or at least confirmation that the consortium is still in the running.

Of course, as losses at Volvo continue to shrink and the international auto market continues to recover, Ford may reconsider selling Volvo altogether. After all, Volvo is Ford's primary means of reaching higher-end buyers around the globe. As analyst Michael Robinet has said, "One option could be to keep Volvo right now because it is Ford’s only international near-premium brand.... Outside of North America, it’s just Ford and Volvo."

Hopefully we'll have a clearer picture of where things stand -- at least as far as Geely is concerned -- after this week's talks in the U.K.


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