Ford Motor Co. expects that in the first quarter of 2010, it will be signing an agreement to sell its Volvo car unit to China's Zhejiang Geely Holding Group. By the second quarter, Ford expects to already have closed the deal.
Ford stated that all of the commercial terms under the deal have been settled but before its completion, Geely will have to secure financing and get approvals from the Chinese government.
In a statement, Ford asserted that the upcoming sale would ensure that Volvo has the resources and the capital investment required to strengthen further the business and build the global franchise, while enabling Ford to continue to focus on and implement its core ONE Ford strategy.
Ford would benefit from closing the sale because it would then have the cash to use to help achieve CEO Alan Mulally's goal of hastening debt repayment as the company moves toward profitability it has projected for 2011.
Ford last posted an annual profit in 2005 however, it is the only US automaker to have avoided bankruptcy and a US government bailout due to the $27 billion borrowing program it completed before the decline for the US auto market that began in 2008.