Talks with the Chinese appear to be going nowhere. An employee bid might be in the offing.
It appears that another group of bidders is now chasing after Volvo, Ford Motor Company’s loss-making Swedish subsidiary, which has been up for sale for months, maybe years.
The Swedish press is reporting from anonymous sources that a group of Volvo engineers — and Ford employees — have also begun to organize a bid for their employer. Concern about the impact of Chinese ownership on the Swedish automaker was cited as the principal reasons for the bid. In the meantime Volvo is receiving aid from the Belgian government where one of its plants is located.
There is no definitive word yet on how far the bid has actually gone.
Ford has never publicly identified the Chinese bidder but it is widely assumed to be the independent Chinese automaker Geely, which has offered to operate Volvo as a completely independent subsidiary.
However, Lewis Booth, Ford’s chief financial officer, recently declined to discuss the state of Volvo discussions, noting the were not in any way complete. Ford reportedly has lined up a Swedish company to take a minority stake in Volvo with a Chinese partner but the details have never been confirmed.
Negotiations with Geely also have gone on for an extended period of time. Chinese have developed a reputation for difficult negotiators, and Geely has a history of protracted negotiation with Western companies.
Malcolm Bricklin, one of the auto industry’s fabled salesmen, thought he had a deal with Geely but wound up being dumped when Geely opened talks with Chrysler.
Chrysler had hoped to talk Geely into a small car venture but the negotiations eventually dragged on to the point where they became hopelessly stalled last year. By the time they stalled, however, Chrysler was heading into desperate financial trouble.
The collapse of the Geely talks, which left Chrysler without a viable future product plan, ultimately served as the basis for the partnership with Fiat.
So far, Ford’s talks with Geely appear to have wound up on the same long road as Chrysler’s talks with the Chinese automaker despite several predictions from outside pundits that a deal would be reached this month.