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Dealers sweat on Volvo sale resolution

On with business: Volvo workers get on with the business of making cars, despite anxiously awaiting the outcome of the sale of the company by Ford.

Volvo workers, dealers get on with business in shadow of Ford’s sale talks limbo

16 Oct 2009

VOLVO employees and dealers are anxious to know the outcome of Ford’s negotiations to sell the Swedish company, according to a leading Volvo executive on a visit to Australia.

Volvo Car Overseas Corporation president Lex Kerssmakers said the sale of Volvo – which Ford bought in 1999 but decided to offload late last year – was being handled by the American management team in Dearborn.

Asked if the sale process that has been dragging on for almost a year was a distraction to Volvo operations, Mr Kerssmakers said: “Absolutely. But we are not really involved. We take care of the operational business.

“We try to have as little distraction as possible, but obviously all employees at Volvo and also the dealers are anxious to know what is going to happen.

 center imageLeft: Volvo Car Overseas Corporation president Lex Kerssmakers.

“It can easily take a few months and we don’t know. That’s why we stress to our employees that whatever happens, whoever the owner is, we need to deliver a sustainable business, so we go on and sell our cars as good as we can.”

Ford is said to be in negotiation with two potential suitors for Volvo – Chinese car-maker Geely Automobile and Crown – a consortium headed by former Ford board member Michael Dingman and former Ford executive Shamel Rushwin.

Geely is reported to have offered Ford $US2 billion ($A2.16b) for the company – about a third of what the Detroit-based corporation paid for it a decade ago.

However, Crown is reported to have offered even less, putting Geely in the box seat should Ford go through with the sale that has been pending since late last year when Ford was reeling from the global economic meltdown.

Both bidders also have offered to contribute several billion dollars to revitalise Volvo once the sale goes through.

Ford hopes to wrap up the sale by the end of this year – a sentiment that Volvo employees and dealers seem to share.

As with General Motor’s sale of Opel, a major sticking point is sure to be the rights to intellectual property.

Volvo has developed several world-first technologies over the years – technologies that an up-and-coming car-maker such Geely would love to buy into.

Mr Kerssmakers, who is the Volvo head office executive responsible for the Australian market along with all other countries outside Europe, the US, China and Russia, said intellectual property rights would probably be negotiated in this final phase of the sale process.

“That’s one of the elements that is probably part of the final package which is all part of the agreement, so I can’t add any sensible comment on that,” he said.

Along with Volvo, Ford has already shed Jaguar, Land Rover and Aston Martin to focus on its core Ford business.

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