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U.S.-Based Crown Consortium Enters 11th Hour Bid For Volvo

Posted in auto industry, Cars, Ford, New Cars, Newsworthy, Volvo by Suzanne Denbow | October 5th, 2009 | Leave a Reply |


After weeks of depressing news regarding what was rapidly shaping up to be the inevitable sale (and subsequent death sentence) of Volvo to Chinese group Geely Automobile Holding, a faint ray of hope has emerged. According to reports, the U.S. based Crown consortium has secured funding from private investors and declared their intent to relieve the ailing Swedish subsidiary from Ford’s hands. Ironically enough, the Crown consortium is spearheaded by former Ford executives, Michael Dingman and Shamel Rushwin (also of Chrysler), though neither the group nor the purchase seem to have any apparent affiliation with the Blue Oval.

Aside from their expressed interest, the details of Crown’s bid are relatively scarce but sources have indicated the group is also procuring financial backing from Swedish investors, presumably with the promise that if the acquisition is successful, production will remain rooted firmly in Volvo’s motherland. The specific dollar amount the Crown consortium is offering has not been announced, but the same discreet messengers charged with leaking the initial information say that although the amount is notably less than Geely’s $2.5 billion, both Geely and Crown have outlined ownership plans that pledge an additional $3 billion investment into Volvo.

As of today, both Ford and Volvo have opted to remain tight-lipped on the matter but we expect more information to break as Ford’s year-end deadline to complete the sale approaches.

Editorial Note: In one of the articles used to compile this article, analyst Gregor Claussen of Commerzbank in Frankfurt told Forbes, “Having a U.S.-led consortium as a buyer might be charming to Americans, but Volvo being a small company needs economies of scale that Geely can provide.” While certainly a valid point from a financially shrewd perspective, what Claussen has obviously neglected to consider in his patronization of the Crown consortium’s bid is the rich lecherous history of the Chinese automotive industry and Ford’s interest in preserving their image. Unlike their Detroit brethren, the Ford Motor Company is controlled by the same family responsible for its foundation in 1903 and each major decision is carefully weighed against its potential to harm their meticulously maintained personal reputation. GM may have had no compunction whoring out Saab to the highest bidder (as evidence by Beijing’s recent purchase of the design and production rights to the Saab 9-5) or leaving their under-performing brands (and dealerships) to die an ugly, public death, but Ford has yet to stoop to such deplorable levels. If their ethos is to be believed, Ford is aware that the sale of Volvo to Geely would be a gross breach of both personal and professional ethics and would place their values no higher than those of the The General. So Claussan’s observation may be factually accurate, but Ford should know it isn’t right.

Primary Source: Auto News

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