Four unions representing workers at Ford Motor Co.’s Volvo Cars say they will approve the unit’s sale to Zhejiang Geely Holding Group Co. only if the Chinese company signs a binding agreement to fund Volvo’s operations and guarantee an independent management.
Geely says Volvo’s management independence is “enshrined” in the purchase agreement. But the unions complain that Geely remains vague about how it will finance the deal, reportedly worth about €1.5 billion. They fear the Chinese company might move Volvo production to China, where labor costs are lower, and shrink the company’s European operations.
Ford and Geely hope to complete negotiations by the Chinese Lunar New Year on 14 February. According to Bloomberg News, Ford will contribute between €146 million and €219 million from the proceeds of the sale to Volvo’s worker pension fund. Ford originally bought Volvo in 1999 for €4.7 billion.