Ford-Geely deal on Volvo close

Ford Motor Co. said Wednesday it expects a final deal to sell its Volvo unit to China's Geely Group would be reached early next year.

The automaker says it's waiting for financing and government approvals. It did not say how much Geely is offering.

The Volvo division has been losing money. Ford and Volvo have shared safety and other technology for 10 years, and any agreement is expected to include continued sharing of intellectual property rights and engineering. Ford's Taurus sedan, for instance, includes Volvo technology.

If the sale closes, it would represent another step in the retreat by the U.S. auto industry from global operations and another takeover of assets by a Chinese company.

Construction machinery-maker Sichuan Tengzhong Heavy Industrial Machinery Corp. is buying General Motors' Hummer brand and China's Beijing Automotive Industry Holdings will pick up some powertrain technology from GM's Swedish Saab Unit. Saab is being closed down by year end unless GM can find a buyer.

Ford took over Volvo in 1999 for $6.45 billion US, but has been trying to unload the Swedish carmaker since last year. It wants to focus on its Ford, Lincoln and Mercury brands.

Auto analyst Matts Carlson estimated Volvo would go for between $2 billion and 2.3 billion US, and predicted a Geely takeover would be good for Volvo.

"Volvo gets a new owner with a lot of money and which I expect will mostly leave it alone because it knows more about vehicle development, vehicle sales and vehicle distribution," said Carlson, of the Goteborg Management Institute.

Volvo would get access to Chinese market

He added Volvo would also get a boost from access to China's fast-growing auto market.

Ford and other North American automakers have been scaling back on operations amid a slump in sales caused by the recession and by consumers moving towards Asian brands.

Earlier this week, it offered retirement incentives to all of its 41,000 U.S. hourly workers and to hourly workers at its components plant in Windsor, Ont., which currently employs 1,600 workers and has 1,000 on layoff.