Ford's sale of Volvo yesterday to China-based Zhejiang Geely Holding Group Company Ltd for $1.8 billion represents a loss of $4.7 billion and finally draws a line under the excesses of the past.
Bill Ford Jr, great-grandson of founder Henry Ford and current executive chairman, was just getting his feet under the table as chairman of the board of directors when Ford paid $6.5 billion for Volvo in 1999.
Geely will pay $1.6 billion in cash, allowing Ford to further sharpen its focus on building the Ford brand around the world, according to non-family president and CEO Alan Mullaly.
The sale will strengthen Ford's balance sheet as it recovers from several years of poor results that was ended with profits of $454 million in 2009. In 2008, losses at the Michigan-based firm totalled nearly $15 billion yet Ford managed to stave off bankruptcy without state aid and was the only US carmaker to do so.
Bill Ford Jr did not make a public comment on the sale, leaving Li Shufu, chairman of Geely, to comment on Ford's brief and financially disastrous ownership of Volvo. "Zhejiang Geely would like to pay tribute to Ford's stewardship of the Volvo brand, and we look forward to continued cooperation as Volvo embarks on the next stage of its evolution with Geely," he said.
Want to get the latest family business/family office news direct to your desktop? Click here to register to receive our weekly newsletter
Are you a member of a multigenerational family business or family office? Click here to subscribe to our magazines