Volvo unions to quiz Geely on financing for purchase

Labor leaders at Volvo Cars will today press China's Zhejiang Geely Holding Group to disclose where it's getting the financial backing for a bid to buy the Swedish carmaker from Ford Motor Co.

The meeting will be attended by Geely Chairman Li Shufu, billionaire founder of Geely Automobile Holdings Ltd., China's biggest private automaker, which has said it's not directly involved in the bid. Li briefed Swedish government officials on Nov. 17 and will meet with Ford and Volvo managers this week.

"We want to learn about their business plan and ambitions for our company," Glenn Magnusson, head of the Ledarna union that represents Volvo managers, said yesterday in an interview. "We haven't had any insight whatsoever into the talks."

Union leaders will use their first meeting with Geely to seek guarantees that future Volvo production and development will remain in Sweden and to request details about the bid's backers. Geely has declined to say who would finance the deal, other than that its supporters include Chinese banks.

Magnusson said workers would be concerned if the Chinese government proved to be ultimately behind the takeover plan.

"As long as the Chinese government views Geely favorably, things may be rosy," he said. "But the day that's no longer the case, what happens to us then? We're going to ask that type of question."

Magnus Sundemo, the head of Volvo's engineering union and also attending the talks, said being made aware of the identity of Geely's backers is "crucial in order to understand if they're long-term players and have the financial muscle to handle this in a good way."

Jakob Interest

Sundemo is also a founder of Konsortium Jakob AB, a Swedish group that's preparing a bid for Volvo. He said he'll be "toning down" contact with Jakob during the Geely visit.

Anders Fogel, a Geely spokesman in Stockholm, said the Chinese company is committed to maintaining production and development in Sweden and that talks with Ford "are definitely heading in the right direction." He declined to provide details of the negotiations or say when they might be finished.

Ford said Oct. 28 that it's focusing on selling Volvo to Geely, which has offered about $2 billion for the unit, less than one-third of the price the U.S. automaker paid in 1999. Dearborn, Michigan-based Ford hasn't ruled out other buyers.

Hans Pettersson, a deputy director at Sweden's Enterprise Ministry, said yesterday that the government has agreed not to comment on the Nov. 17 meeting with Li and Geely officials.