Zhejiang Geely Holding Group Co. may have to spend at least 10 billion kronor ($1.4 billion) to revive Volvo Cars after buying the Swedish brand from Ford Motor Co., Volvo union officials and board members said.
The figure would be “an absolute minimum” for financing car development, marketing, production and distribution in the next year, and the money needed could be double that amount, Glenn Magnusson, head of the managers’ union at Gothenburg, Sweden-based Volvo, said in an interview.
“We still want them to show us that they have the financial strength,” Magnusson said yesterday by telephone. “We haven’t seen anything yet and we are not satisfied.”
Anders Fogel, a partner at Brunswick Group in Stockholm who acts as Geely’s spokesman, said talks are proceeding according to plan, and that the carmakers are sticking to a target of reaching an accord by the end of March.
Ford is “still working toward a definitive agreement by the end of the first quarter and to close the sale by the end of the second,” said Mark Truby, a spokesman at the Dearborn, Michigan-based company.