Geely Receives Beijing's Blessing to Buy Volvo
Geely is the first Chinese manufacturer to receive the green light for an overseas acquisition, the source added, which means Sichuan Tengzhong is still holding talks with Chinese officials over the Hummer deal.
Details are still sketchy but it appears that Geely has prepared around $2 billion for Volvo that would help the ailing manufacturer cope with the decreasing demand. The Chinese manufacturer has already hired consultants and an experienced finance executive to supervise negotiations.
According to various media reports, Geely will reportedly use Chinese based engineers to provide basic engineering tasks on the products designed by the Swedish workers. Additionally, the production of Volvo models in China, as well as the increase in units sold in the country are also on Geely's agenda.
But the deal is far from being completed, as Geely might encounter some unexpected problems. For example, Volvo's workers believe Geely will do no good to the company because the Chinese are lacking experience and are far from having the know-how Ford, the current owner, currently holds.
"How could you expect a less experienced Chinese owner to turn Volvo around if even Ford failed to do so?" Magnus Sundemo, head of Volvo Car Corporation engineers union, was quoted as saying a few days ago.