Selling a Car Company Ain’t Easy
Volvo S60 Concept
Both Ford and GM are experiencing problems selling off their foreign carmakers—Volvo and Opel, respectively. One of the reasons is concern about intellectual property.
For 10 months, Bloomberg reports, Ford and Geely (China’s largest car company) have been trying to finalize the transfer of Volvo, but they’re stuck over whether and how Geely will assure Ford that its technology and new-model blueprints will be kept secret. As we all know, some in China have little regard for patents and intellectual property rights.
Fueling this fire is the October 14 arrest of former Ford engineer Xiang Dong Yu, accused of stealing over 4,000 Ford documents in order to get himself a job with a Shanghai auto firm.
Because Volvo is “completely integrated into Ford’s product development,” said one analyst that Bloomberg quoted, selling it is “like selling a room on your house. You can’t separate it easily.” Back in July, General Motors rejected an offer to buy Opel because a Chinese company couldn’t provide design and technology safeguards to its liking.
Opel Astra, Frankfurt 2009
And there are still snags to the Opel-Magna deal being worked on in Germany. Last week it looked like the European Union and its Competition Commissioner were pressuring GM to reconsider its sale to Magna. The €4.5 billion in state aid offered by Germany to promote the sale appeared to them to be, well, a bribe—or maybe we should say “an improper inducement.” But today, the Commission backed down, saying they would not oppose a sale. They just want to be sure all the rules are followed. Mmm, right.
GM’s troubles aren’t over yet. Spanish Opel workers have just turned down Magna’s latest offer and scheduled a four-day strike. It’s about job cuts, of course.
If Hummer finally went out the front door to China, Opel is having a very tough time making it through the various political minefields set up by the Europeans.
Is it right for the EU to insert itself in a deal between a U.S. corporation and a Canadian-Russian combine for a German car company? Let us have your opinion, please.
—jgoods
Car Industry News, Car Minded, Car Politics, Foreign Cars, General Chat
Selling these brands wasnt going to be straightforward ever. Under GM management Saab became an Opel in a swedish suit so without access to Opel platforms Koenig… needs a deal somewhere else or start from scratch. Opel is also Vauxhall for the English and its assembled all over Europe so lots of vested interests are going to interfere. Volvo has a similar problem its a Ford Mondeo/Focus/ Mazda6 etc in a sweden suit all thats for sale is the badge to continue production you need a lot of Ford bits. Ford Europe used Peugeot Diesel engines in Transits Jags Mondeos Focus Landrover Rangerover Volvo etc so thats another outside supplier to deal with. Not too many companies like giving away their intelectual property free in someone elses deal. Hummer is the exception as its only a reskinned Chev and will still be made in a GM factory using Chev parts.