It's August 1998, and I'm somewhere over Nebraska, sitting next to soon-to-be Ford CEO Jac Nasser in the company's Gulfstream jet, en route to Detroit after a weekend at the Pebble Beach Concours. As usual, we're talking shop, and the topic of conversation soon turned to the consolidation mania sweeping the auto industry.
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In May Daimler had announced the infamous "merger of equals" with Chrysler, while VW Group boss Ferdinand Piëch had snapped up Bentley, Lamborghini, and Bugatti in a stunning rapid-fire buying spree a couple of months later. The enigmatic Piëch thought he'd bought Rolls-Royce, as well, only to have it snatched from under his nose by BMW's wily Bernd Pischetsrieder.
Ford was cashed up, and Nasser eager to spend. In addition to its homegrown Lincoln and Mercury brands, Ford owned Aston Martin and Jaguar, and had a controlling interest in Mazda. But Nasser thought there was more opportunity out there.
"What do you think of Volvo?" he asked suddenly. It was an interesting question—Volvo's management had decided to focus on heavy trucks, and the car business was in play. I replied I thought it had the potential to command the premium pricing of, say, BMW. "What do you think it's worth?" Wow. I stammered briefly: "Jeez, Jac. How would I know?" Then years of writing magazine cover lines kicked in and I fired off a glib one-liner: "Buying a premium brand is probably a lot like buying real estate—you don't pay too much; you just pay it too early."
It's probably a good thing I don't run an automaker. Or a real estate business, for that matter. Ford paid $6.45 billion for Volvo's car business in 1999, and sold it for just $1.8 billion in 2010. The buyer was little-known Chinese billionaire Li Shufu, chairman of an obscure Chinese automaker called Geely.
The quietly spoken, modestly dressed Li, who writes poetry for recreation and smiles and chuckles frequently as he answers media questions, hardly fits the stereotype of a hard-charging, self-made auto tycoon. Born in 1963, he started working as a photographer, dealt in scrap metal, and began making parts for refrigerators in the 1980s. He graduated to making whole appliances, dabbled in construction, and started making motorcycles in 1993. In 1998 the first Geely cars—the name sounds similar to a Chinese word for "lucky"—rolled off the assembly line. The quality was so bad Li reportedly refused to sell them.
By 2002 Geely, China's only non-state-owned automaker, was building cars of its own design to—by Chinese standards—acceptable quality levels. But Li wanted to be one of the first to sell a Chinese-made car outside his home market. A Geely sedan was displayed at the 2006 Detroit show, and Geely announced plans to begin export of 2,000 vehicles a year to the U.S. by 2008. However, with build quality and design features at least 20 years behind the competition, Li quickly realized the idea was a non-starter. That's when he started discussions with Ford about Volvo.
It took patience—and Ford's brush with bankruptcy—but Li got Volvo. Today, Volvo cars are being built at two factories in China, the brand is profitable, sales are on the rise—2014's total of 465,866 cars was an all-time record, with 81,221 of those sold in China—and engineers are working on a new C-segment platform that will be shared among Volvo and Geely cars and SUVs. And this year the long-wheelbase S60L from Volvo's new plant in Chengdu, China, will become the first Chinese-built car to be exported to the United States.
How long before Geely joins Volvo here in the States? Li won't elaborate. "There is no specific timetable," he says simply. "Ambition? Yes. Determination? Yes. But I'm also a very realistic person. We have to have every step right."
Makes sense. As Henry Ford once said, "Before everything else, getting ready is the secret of success."
More from The Big Picture:
- SUVs Go Ultra-Luxe
- Highway Hell: America's Interstates Are Falling Apart
- Alternate Reality: Akio Toyoda's Sports Car Problem
- Dead End: The Middle of the Road Has Nowhere To Go
- Distracted Drivers and the Fundamental Disconnect in the Auto Business
I can’t remember a time when I wasn’t fascinated by cars. My father was a mechanic, and some of my earliest memories are of handing him wrenches as he worked to turn a succession of down-at-heel secondhand cars into reliable family transportation. Later, when I was about 12, I’d be allowed to back the Valiant station wagon out onto the street and drive it around to the front of the house to wash it. We had the cleanest Valiant in the world.
I got my driver’s license exactly three months after my 16th birthday in a Series II Land Rover, ex-Australian Army with no synchro on first or second and about a million miles on the clock. “Pass your test in that,” said Dad, “and you’ll be able to drive anything.” He was right. Nearly four decades later I’ve driven everything from a Bugatti Veyron to a Volvo 18-wheeler, on roads and tracks all over the world. Very few people get the opportunity to parlay their passion into a career. I’m one of those fortunate few.
I started editing my local car club magazine, partly because no-one else would do it, and partly because I’d sold my rally car to get the deposit for my first house, and wanted to stay involved in the sport. Then one day someone handed me a free local sports paper and said they might want car stuff in it. I rang the editor and to my surprise she said yes. There was no pay, but I did get press passes, which meant I got into the races for free. And meet real automotive journalists in the pressroom. And watch and learn.
It’s been a helluva ride ever since. I’ve written about everything from Formula 1 to Sprint Car racing; from new cars and trucks to wild street machines and multi-million dollar classics; from global industry trends to secondhand car dealers. I’ve done automotive TV shows and radio shows, and helped create automotive websites, iMags and mobile apps. I’ve been the editor-in-chief of leading automotive media brands in Australia, Great Britain, and the United States. And I’ve enjoyed every minute of it. The longer I’m in this business the more astonished I am these fiendishly complicated devices we call automobiles get made at all, and how accomplished they have become at doing what they’re designed to do. I believe all new cars should be great, and I’m disappointed when they’re not. Over the years I’ve come to realize cars are the result of a complex interaction of people, politics and process, which is why they’re all different. And why they continue to fascinate me.Read More
