Back in 2008 was when the first news surfaced that Ford was interested in selling the Volvo name at the height of the recession, and the marque probably seemed a good option to sell at at time Ford was struck with large losses (and Volvo was never a particularly glamorous name to own anyway: Remember “Buy Volvos: They’re boxy, but good!). Presumably Ford pursued several buyers. Whatever negotiations took place, it took until 2010 for a genuine buyer to surface, with Chinese car maker Zhejiang Geely Holding Group (the parent company of Geely Automobile, floated on the Hong Kong stock exchange in 2004) as the interested party. The agreed value was $1.8 billion, but the real-world price wasn’t known until today, when Geely added $1.3 billion in cash to its initial $200 million. The absolute value won’t be revealed until later in the year, but it wouldn’t be surprising to see another hundred million dollars heading to Ford’s pockets (due to variations in currency values, and final contract detailing).
This purchase will probably go a long way to help Geely’s chairman’s goal of having two thirds of the company’s output sold overseas. It’ll also result in Ford seeing a loss of something like $5 billion on the transaction–though, of course, net income from Volvo during the 10 years of Ford ownership will have offset this somewhat. Ford and Geely retain a connection over the Volvo marque’s IP, and Ford will continue to supply some parts for the cars.
What will Ford do with the money? Here’s an idea: Invest it in transforming Ford from a gas-guzzler-maker into a more future-facing and planet-friendly electric car company. After all, it’s in the best traditions (well…kinda) of its proud founder.
To keep up with this news, follow me, Kit Eaton, on Twitter.