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Auto Industry

Chinese Delegation Fly to Sweden to Clinch Volvo Deal.

Published fredag 26 mars 2010 kl 10.04
A deal for Volvo cars is expected to be signed on Sunday

China's Vice-President Xi Jinping is on his way to Sweden this weekend and will reportedly attend the expected signing of a 2 billion dollar takeover deal by Zhejiang Geely for Volvo cars.

China's official Xinhua News Agency reports that during a four day state visit, Xi will meet Sweden's King and senior officials and visit the city of Gothenburg where Ford owned Volvo has its main factory. Media reports say the signing ceremony will take place on Sunday.

Zhejiang Geely, parent of Hong Kong-listed Geely Automobile Holdings Ltd , plans to pay up to $2 billion for Volvo and pull the Swedish carmaker out of the red by 2011 by adding a new factory in China to nearly double its annual global production.

Volvo spokesman Olle Axelson confirmed to the media that preparations are under way for an announcement at company headquarters in Gothenburg

"People are anxious to move forward," he said. "Things are looking good for Volvo right now, and we want to get on with selling our cars."

However such optimism hasn't been shared by the workforce. As Radio Sweden reported on Thursday, the deal has met opposition from three of the four unions at Volvo, stating that Geely doesn't have enough capital to manage future investments and expansions.

The unions cannot block the deal but pundits say the backing of the workforce will be important if Zhejiang Geely's goal of pulling the Swedish carmaker out of the red by the end of next year is to be achieved. Ford's Chief Financial Officer is said to be flying to Sweden this weekend.

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