Chinese automaker Geely has managed to find USD 2.1 billion worth of financing and will seal an agreement with Ford for the acquisition of Volvo Car Corporation by the end of this month, according to reports. The capital was raised from unidentified financial institutions and local governments.
An AFP report said that Geely does not plan to move Volvo production of to China. Trade unions in Sweden are fearing job cuts at Volvo Cars, which has 16,000 staff on its payroll in the high cost Scandinavian country and 8,000 more across the globe.
At the same time, news sources from Hong Kong (where Geely is listed) say that the Hangzhou based company is selecting locations in China for Volvo production, with Beijing and Tianjin vying for the project. The reports add that Geely will set up a plant in China with a production capacity of about 300,000 vehicles annually, nearly doubling Volvo’s global output. This move is aimed to steer Volvo into profitability before 2011 through China’s lower manufacturing and labour costs. If this plan works, the fears of the well paid fatihfuls back in Gothenburg is very likely to turn into reality.