Geely says talks on Volvo 'very tough' due to Ford

Shanghai, March 19 (Gasgoo.com) Talks between Zhejiang Geely Holding Group and Ford Motor over Geely's acquisition of Volvo have hit a snag likely due to problems at Ford, said Geely's chairman, a newspaper reported today.

Geely Chairman Li Shufu told the Wall Street Journal that talks were "very tough" and "the situation is changing constantly." He was interviewed on the sidelines of a ceremony at the company's affiliated Beijing Geely University.

"If the deal fails, the problem is not on our side. We have not violated any part of the agreement," he told the newspaper, indicating it would be the U.S. automaker's fault, but not specifying what the problems were.

China Daily said yesterday that financing and technology-transfer issues may delay Ford's Volvo sale to Geely, citing insiders. The two companies agreed in December 2009 that Geely would acquire the unprofitable Volvo unit from Ford.

Geely had aimed to close the Volvo deal for up to $2 billion by May. Geely's spokesman said today the company's aim to sign a purchase agreement by the end of March and complete the deal in the second quarter had not changed.

"We are still expecting to sign an agreement within the first quarter," a Ford spokesman also 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.