Ford cites Volvo progress as Geely sees 'tough' talks

Ford Motor Co. Chief Executive Officer Alan Mulally said talks to sell the automaker's Volvo unit to Zhejiang Geely Holding Group Co. are proceeding, while the chairman of the Chinese company raised doubts about a deal.

"We are making progress on the negotiations," Mulally said today in an interview in Shanghai.

Geely Chairman Li Shufu told the Wall Street Journal that negotiations were "very tough" and "the situation is changing constantly." Interviewed on the sidelines of a ceremony at the company's Beijing Geely University, Li told the Journal that "if the deal fails, the problem is not on our side."

Ford aims to sign a $2 billion accord to sell Volvo Cars to Geely by month's end, three people familiar with the talks said last week. China Daily said yesterday that financing and technology-transfer issues may delay a sale, citing people familiar with the matter.

Mulally put Volvo on the block in late 2008 as part of his strategy to drop European luxury lines to focus on Dearborn, Michigan-based Ford's namesake brand. He has sold the Jaguar, Land Rover and Aston Martin luxury brands since 2007.

Ford, Geely Outlook

"We are still expecting to sign an agreement within the first quarter," John Gardiner, a Ford spokesman, said today. Ford said Dec. 23 that it expected to have a Volvo deal signed by March 31 and to complete the sale by June 30.