Theory Teacher's Blog

Volvo, Ford, Zhejiang Geely

Ten years ago, in 1999, one of the largest American car manufacturers, Ford Motors, bought one of the largest Swedish car manufacturers, Volvo. But things haven’t gone so well for Volvo since then… or for Ford… so now Ford, according to the newspapers [here and here],  is selling off Volvo to the Chinese company, Zhejiang Geely. And if you’re a globalization theory freak (like I am), then you’re thinking, “oooh, that’s globalization, wowee zowee.” And that darling globalization columnist/cheerleader for the NY Times Thomas Friedman is doing a little jig, singing, “See? See [here]? I told you so! I told you so! It’s a flat world after all.”

I got curious about the Geely Holding Group that owns the car manufacturer. According to the Wall Street Journal [here], they were created in 1986, are based in Hangzhou, and their publicist is the Brunswick Group, based in London. According to a NY Times blog [here], Geely means “lucky” in Chinese and has the backing of Chinese banks, as well as a lot of investment from the famous bank holding group Goldman Sachs, based in New York. Apparently, they’re selling quite a lot of nifty cars these days, and that is pretty dang nifty… apparently….

one of Zhejiang Geely's cars

But BUT BUT, according to its own website, the automobile company was incorporated in the Cayman Islands, and its company structure includes 17.9% ownership by the TOSCAfund, 58% by Proper Glory, and only 24.1% by shareholders. The TOSCAfund, according to its own website, most of which is inaccessible without a password, is a British company that mostly engages in “unregulated collective investment” (i.e., a hedge fund.)… …Oh, by the way, the villain of the James Bond movie Quantum of Solace (which I’ve blogged about [here] before) has his secret meeting at a performance of the opera La Tosca by Puccini… …As for the Proper Glory Holding Company, apparently based in the Virgin Islands, I haven’t been able to find much about it on the internet. Both TOSCA and Proper Glory seem to be somewhat inaccessible to the general public and lacking in transparency, as the Volvo union discovered [here]. The investment bank JP Morgan was involved in Proper Glory’s attaining a controlling stake in Geely according to Reuters [here]. I’m sure there’s more, but it’s hard to find out who these people really are.

So, after about half an hour of a little digging with our trusty friend Google, this is what I found, and so, apparently, it’s pretty easy to go much deeper than the reporting of the Wall Street Journal, and it’s even easier to reveal something more complex than anything that that “flathead” idiot Friedman ever observed in his bestselling novel, uh… er… I mean, book.

Now what should we do with this information? It’s creepy and weird and hard to make sense of, but oughtn’t we be able to come up with a better, more persuasive theory of globalization than Friedman? Unfortunately, truth isn’t always the same as persuasion… but still….


December 27, 2009 - Posted by | finance, global

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