Geely needs US$1.4 billion to save Volvo

Zhejiang Geely Holding Group will likely spend more than US$1.4 billion to breath life back into Volvo Cars after acquiring the struggling Swedish automaker from Ford, Bloomberg reported. According to Glenn Magnusson, head of the managers’ union at Volvo, the figure is described as an "an absolute minimum" necessary for research and development, along with marketing, production and distribution costs, and could easily swell to double the projected amount. As Ford and Geely approach the closing of a purchase agreement, unions at Volvo expect Geely to demonstrate it can afford to fund the company after the US$2 billion transaction is completed. Geely is currently in the process of raising the necessary capital for the deal through Chinese financial institutions and hopes to return Volvo to profitability by the end of 2010 at the earliest.