Selling a Car Company Ain’t Easy

Volvo S60 Concept

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

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

2 Comments

  1. The dilemma is ideological at the base! American corporate interests now capitalized on the Beijing, Shanghai, Hang Seng, stock markets and safe from the money printing presses of the dollar, want somehow to preserve patent rights, and American thing, and impose them on a communist regime in Asia! They are now going to pay in their own fvcking blood for absconding with American Capital, meant for re-investment in America, and earned by American backs! The greedy bastards want our asses served to them on a silver platter, no strings attached in Asia by us! They cannot eat their cake and have it too! Good on Asian for kicking their asses this way! On a recent trip to Shanghai, copies of Windows 7 were on sale openly in kiosks on the streets for little more than the cost of the copy disk! They simply do not enforce U.S. Patent laws at all! I hope they rob the greedy sell out artist Capitalists this way – just to punish them for what they did to America! What did they do to America?” SEE: http://uprooted.jessicareeder.com/2009/09/detroit-and-the-100-dollar-house/comment-page-1/#comment-3003 and weep! Even the tools for production in Detroit were scrapped and sold to China as scrap metal by the corporatists before they left to build better factories in China and take our jobs, culture, society, way of life, with them! Remember, most Foreign cars especially from Asia are built with Chinese manufactured parts, even GN(America) has trucks with Chinese built engines, sold in America at American prices today! The Bastards!

  2. 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.

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