Ford picks Geely… for now

October 28, 2009

Whatever reservations Ford may have had about selling Volvo to Geely and potentially exposing all of its competitive secrets to pirate-infested Chinese markets, they appear to have been laid to rest … for now.

The U.S. automaker named a Geely-led consortium as preferred bidder for the money-losing Swedish unit, estimated to be worth about $2 billion. The news is conspicuously coincidental — as many such stories are — with intensely routine negotiations in Hangzhou between top trade officials of the two countries. Naturally, Ford left open the possibility that it could back out of the deal, saying more detailed talks were needed.

It’s been nearly a year since Ford began efforts to sell Volvo, and only a week ago a source was telling us that concerns about intellectual property rights were threatening to scupper the deal. That followed news of a former Ford engineer’s arrest in the United States on charges of stealing trade secrets from Ford and using them to try to get work with Chinese auto makers. Good thing Volvo is such a safe brand; even with a preferred bidder in place, this asset sale could prove to be a wild ride.

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In Carmaker’s Collapse, a Microcosm of South Korea’s Woes

“Chinese company BOE got the technology they wanted. All we got was layoffs,” said Hwang Pil-sang, a Hydis worker.”

“We trusted their promise to help us into the vast Chinese market,” Mr. Yang said. “In the end, they kept none of their promises, and they got what they wanted: our technology.” asia/24seoul.html?pagewanted=1&_r=2&ref= asia

1. Volvo is a next ssangyong.
2. After chinese company get the technology they wanted. All volvo workers will be dismissal.
3. After chinese company get volvo technology, Chinese company kill US auto industry ‘first’.

Posted by dsjflksj | Report as abusive

Trade secrets, intellectual proprties, and corporate espionage would not be issues if Volvo were to be sold to
an automotive manufacturer with comparative technology.
The win-win deal of the century would be BMW purchasing Volvo. They have market proximity, the immediate acceptance by the BMW public as a “Valued” brand and a great “stablemate” for BMW. Just think, BMW “The Ultimate Driving Machine, and safe too…….Volvo, “The Ultimate Safe Machine……and a driving machine too !” BMW’s ultra-high lease content has pinpoint marketing and would allow options for clients considering a “different seat”. Owner retention would be enhanced by having this option and keep quality clients in a BMW-Volvo family. But hey, this make too much sense to me !!

Posted by Paul Portu | Report as abusive

Give me a break. Just because a private Chinese company is buying Volvo and not BMW, it’s all of a sudden corporate espionage? What part of “buying” does Mr. Paul Portu above not understand? How much technology did Ford “steal” from Volvo’s P2 chassis? Can you say Ford Focus and Ford Taurus?

What a bunch of snobs.

Posted by Jonathan | Report as abusive

The US seems to be missing the point on China. China has arrived. While America rocks on its heals and spouts slurs about cheap China made this and that, and whines about having its designs pirated China is busy helping itself to more pie. Finally- Li Shufu is not a man to be underestimated.

Posted by HelenW | Report as abusive

Let me tell you a story. When I attended graduate school in the early 90s, I served as the graduate student association body. One day, I did an analysis of the ethnic breakdown. Mechanical engineering department has 40 students doing MS or PHD. Out of the 40, only 1 is white American. The rest is either from China or India. When I did my MS thesis presentation, a group of Japanese companies came over. They included Hitachi and NEC. They sat in my presentation, took a copy of my thesis, and went happily back to Japan with their latest treasure hunt. So my conclusion is that Japanese are much smarter when they steal ideas from the US. Nobody seems to complain about them also.

Posted by TTSmart | Report as abusive

Well, traditionally the most reckless industry espionage in Germany used to be committed by – Americans. So, it seems that this tool of the trade, too, has just been copied by the Asians.

The deal with BMW proposed by Paul is my dream, too – technically their would be lot of synergies, while the brand images are very complementary. Just too bad that BMW don’t have the funds and the confidence right now.

Posted by Mike | Report as abusive

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