Posted on 08/02/2010 6:23:26 AM PDT by KingOfVagabonds
In 1999, Ford paid $6.5 billion for Volvo. Today, Ford sold Volvo to Zhejiang Geely Holding Group for $1.8 billion — a loss of over 72%.
(Excerpt) Read more at jalopnik.com ...
Doesn't hurt my feelings one little bit.
At least Ford didn’t take bailout money.
Volvos have always been overpriced loosers! Glad to see them go!
Because small production lots in a socialized country with an aging demographic makes absolutely no sense when your biggest market sudden discovers that their intergenerational equity line has been cut off?
The correct analysis has to look at how much they lost on an annual basis (the cumulative operating losses over 20 years) while holding Volvo, and add that to the difference between 6.5B and 1.7B. In financial terms - this was such a bad investment - they should dig up the bodies of the folks who made the decision 20 years ago and shoot them all over again.
Years ago when PanAm Grace sold it airlines to a Mexican purchasor for $1, the Mexican newspapers were full of articles on what a bargain had been made. Until someone reminded the press that the Mexican buyer also picked-up Panagra’s $40 million debt. The company was bankrupt within the year, and the original owners of Panagra were $40,000,001.00 richer.
My wife and I liked the styling of the xc90 a few years ago but when I looked at it they were way way way overpriced especially when you consider the options that you get with them. You pay a premium price for a stripped down vehicle.
I’m sure the chinese businessman just wants their technology. They do have some good safety R&D.
“Volvos have always been overpriced loosers!”
Not at all.
I do not know their status now, but not too many years ago
I had many Volvos. Except for a P1800 in my bachelor days, I had Volvo wagons. They were all great cars, and the safest in the world.
The only accident in my life was on a country lane.
A young kid in a pickup truck came up to a stop sign.
He paused but then proceeded to cross. I was doing over 50 and no way to stop.
I smashed the left bed of the pickup, spinning him 180 degrees.
Fortunately it was the pickup bed and not the cab.
Anyway, he got a bloody nose, and a truck requiring a tow.
I drove on to my appointment, 20 miles away. Well, I did detect a small radiator leak at my destination.
Try that in any other car.
The question is why did they pay 3x its value?
I really can’t see how Geely will do any better. Chinese will expect much harder work than they presently get at Volvo, and will run it on the cheap. I can’t imagine the socialized European workers being complacent for too long.
The question is why did they pay 4x its value?
Friends of mine were owners of Grace Shipping and Panagra. They made their money and got out before it eate them alive!
Might have been some opportunity on the class 8 truck side.
I did that in a VW Jetta. Car( Ford Tarus ) pulled out doing a left hand turn and then froze. It was go into a head on with the left hand lane traffic, t-bone the car, or try the curb. I hit between the rear tire and the bumper, spun the car 180.
Broken head light.
Pick up trucks rear ends are light as feathers. So too cars.
Thing is Sweden is going freer and freer market and striping/dropping gov/socialist companies/programs left and right.
They are smart. There is a world of subsided, taxslaver supported manufactures out there. No need to compete with who can rape their citizens the most to have some local buggy whip company.
Good for Sweden.
My Volvo saved my family's and my life in a large multi-car/bus accident. I am biased toward them.
Maybe Geely wants to learn how to build a car that won’t fold like origami when it gets hit.
}:-)4
I am thankful to be alive.
I calculate that I have driven one million miles with no accidents, other then the stupid kid in his F100.
As for Volvo, I am sure they have taken a nose dive since the 1990s, when I last owned them.
My other cars were all Toyota.
My last American car was a Buick, 1970s.
It died on the way home from the dealership, the day that I took delivery, hahaha.
Geely probably wants to scavenge Volvo for it’s safety technology. There was a video going around the net a few years back of the Geely Landwind in a simulated 30mph frontal crash. The dummy was all but decapitated.
How far from the dealership did you live?
Front-engined cars at least. For every vehicle there's a sweet spot to hit, mainly depending on drivetrain layout. Hit it there with any regular car and you'll knock the other car out of the way while doing minimal damage to your own car. Crash energy has to go somewhere, and by hitting the vehicle there you turn most of the energy into the spinning of that vehicle (using the engine as the pivot point) rather than crumpling your front end. They teach this to drivers of VIPs in advanced driving school so they can escape from ambushes and run blockades. I'm sure this is old-time knowledge to movie special effects guys too.
How far from the dealership did you live?
The Buick dealer? 50 miles or so. (Jackson, Tennessee)
They have a very loyal customer base. That will change though.
The factory used to still stock parts dating back to their first models. I do not think the Chinese will continue that.
Jacques Nasser, a Lebanese-born Australian, is the man responsible for for Ford’s unwise acquisitions of Jaguar, Land Rover, Volvo and Aston Martin during his time as CEO of Ford Motor Company from 1998 until 2001.
Of the European acquisitions, only Volvo and Aston Martin contributed any significant value to FoMoCo. You can see the Aston Martin styling influence in Ford’s latest models like the Fiesta and the next-gen Focus.
From Volvo, Ford learned how to build a solid vehicle, and the lessons paid off in crash tests for a number of Ford models over the past couple of seats. FoMoCo also learned how to build a proper automotive seat from Volvo’s legendary orthopedic surgeons/seat designers. Before it got its hands on Volvo, Ford built some of the worst seats in the industry. Now its buckets and benches are among the best in the car business.
Ford also learned how to build a small car from the large stake it had in Mazda. It has a smaller stake now. This is arguably the best return Ford has received on any of its investments in other manufacturers. As smaller cars become responsible for larger shares of Ford sales in the future, its investment in Mazda will keep paying dividends.
FoMoCo borrowed engines from Jaguar (the V8 offered in the Lincoln LS) and Volvo (the turbo inline five-cylinder used in the global version of the previous-generation Escort). Both the 3.0 V6 in the Ford Fusion and the Contour before it and the 2.5 four in the same models are Mazda designs. Now Ford is building some of the best engines in the industry in terms of horsepower to fuel economy with the new 300 hp V6 in the base 2011 Mustang and the Ecoboost line of turbocharged, direct-injected V6 and inline fours. Much of what Ford learned about turbos, it learned from the Volvo acquisition.
- JP
The old 240 Bricks were great cars. Volvo should still be producing that car today. Solid as a rock, good milage, good capacity and good safety. Throw in modern fuel injection, durable seats, and better rust protection, and that car stands up well to anything you can buy today.
And the darn engine just runs forever. Mine finally rusted away, but the engines were solid right up to the very end.
As for the Greely, I recommend the Mythbusters episode where they test the myth that a head-on collision is twice as bad as a crash into a solid object at the same speed. They take a Greely sedan and crash it into a concrete barrier. The 15 foot long Greely compacted down to six feet, bumper to bumper.
To say they need some safety engineering is a serious understatement. If they were smart, they would just take the old 240 tooling out of mothballs, and start making Bricks again.
That was the only car ever to receive zero stars in the ADAC (German auto club) safety tests. It wasn't bad engineering. They just heard we in the West use crumple zones to make cars safer, and they thought they'd do us one better and extend the crumple zone all the way to the back seat. That'll make the car REALLY safe.
Fair enough - that has to be netted out. Whatever the value of those contributions were - it still was a bad decision overall to purchase Volvo and then proceed as they did. Ford could have contracted with Volvo (or with some other source) to bootstrap them in areas like seating, etc. It’s like GM’s investment in Saab - if you’re going to buy it, then make it succeed, don’t just passively hold it and let it wither.
“To say they need some safety engineering is a serious understatement. If they were smart, they would just take the old 240 tooling out of mothballs, and start making Bricks again.”
I agree. I loved all of my Volvos, 4 or more, but they were from when Volvo was Swedish.
That would explain how the F-150 went from death drap to pretty safe truck around 2003.
I had two 240’s.
The 1978 was a tank. It was indestructable.
The 1984 was a nightmare. After 50k miles everything except the drivetrain needed to be replaced(waterpump, fuelpump,alternator,etc.).
The 2.4 liter engines were great. In the 60’s and 70’s they made great cars. In the 1980’s the engines were still good. They were always safe because they were built like tanks. However, the second one costs me so much in misc. parts I switched to Toyota pickup trucks. I am now on my second Tacoma with over 100k miles.
I had an old Honda Civic 1600 back in the day. This was their hopped up hatchback before they came out with the Civic SI. I loved that car. It had great a high-revving engine, sticky Perrelli tires, and was the very thing for zipping around traffic in Brooklyn.
One day I was crossing Cross Bay Boulevard, and as I was crossing, I saw a big ol' Buick coming at me, full speed, right at my door handle. At that point, my only choice was where I was going to take the impact. If I hit the brake, I would take it in the engine. Steady as she goes, and I would take it in the door handle. Hit the gas, I and would take it on the rear tire.
Since I am still here to type this, obviously I took Option C, and hit the gas. The impact spun the car around, but there was very little lateral motion, so my wife and I were fine. All that engineering education paid off in an instant.
I thought Ford designed the Jaguar V-8.
The Volvo fuel injection systems from the mid-80s were not as reliable as they should have been, and a lot of the Volvo dealers did not know how to get the mass air sensor to work properly. But when you got them dialed in, they would run forever. It was really a matter of finding the right mechanic.
I loved the old Civics, great cars. The introduction of that CVCC engine when our auto company execs were saying low-emissions engines weren’t practical was just cold-blooded. You’d think they would have woken up right then and realized they had serious competition, but no, they sat on their past laurels, asleep for another decade or so.
BTW, if you like hot hatches, if you ever get the chance you have to try an old Peugeot 205 GTI. They weren’t easy to drive, but getting lift-off oversteer on a front-wheel drive car is a blast (at least when it’s on purpose). Outside of the US, they pretty much defined what a hot hatch should be.
I've always wondered why sometimes they contract, other times they buy. IIRC, one of the biggest things Mercedes got out of the Chrysler buy was that semi-automatic transmission, but that ended up costing a LOT of money. Then you have Lotus, who is happy to contract for anything, especially engines (Dodge Sprit R/T), suspension (Toyota MR2 and Supra), chassis (Tesla), and more. Of course that didn't keep them from being bought by GM back in the 80s to contribute tech to the Corvette ZR-1 (engine, steering, suspension and braking), the Opel Omega (a.k.a., Vauxhall Carlton) super-sedan, and others. Now Proton (the Malaysian state car manufacturer) owns Lotus, and Lotus tech is going into their cars.
I'm fine with either way, as long as Ford didn't adopt the Jaguar's infamous Lucas electrics.
I’m pretty sure Ford did the Jaguar V-8. Jaguar had absolutely nothing in the pipeline and had settled on a cheaper SOHC 6 cyl motor for the sedan and 4 seater XJS sports car.
Lucas quality was well known at Ford. I’ve owned Jaguars that would short out in a light fog. How they got along with this trait in the UK is a mystery to me.
Geely is supposed to begin selling cars in North America this year. There is no doubt that they purchased Volvo to gain insight into the safety technologies and the QA processes from the European builders.
Other than that - and it's a big other - they were almost as good as their reputation.
This reminds me of one of P.J. O'Rourke's old automotive articles. They were driving the most gas-guzzling cars up the coast. One was a Jaguar V-12. He said quite often the alarm would go off in the middle of the night, just to remind you it was a Jaguar.
Ah, P.J., my favorite source of automotive wisdom,
"And there’s the end of the American automobile industry. When it comes to dull, practical, ugly things that bore and annoy me, Japanese things cost less and the cup holders are more conveniently located."
Possible, but Ford can still make big trucks, the Ford brand has a good rep.
I’m seriously jealous over the E-Type. It is one of the most beautiful things ever to have hit the road. Of course that XK 150 is quite gorgeous too.
The Mk VII says “British Taxi” too much for me though.
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