Volvo

"At the turn between the 1960s and 1970s, Asea, L.M. Ericsson, Volvo, Skånska Cementgjuteriet, and Rederi AB Nordstjernan were the five largest companies in Sweden. In Hermansson’s book, the fifteen original families were named Wallenberg, Söderberg, Wehtje, Johnson, Bonnier, Kempe, Klingspor, Jeansson, Dunker, Broström, Schwartz, Hammarskiöld, Jacobsson, Åselius, and Throne-Holst."

"In April 1974, Michelin sent Louis-Noël Repoux, the former head of its personnel services and former member of the management, to Lyon to get Berliet back on track and find it a partner. Discussions with Volvo failed: the people from Clermont did not want to let the Swedish group run the business (which was demanding some six thousand job cuts). And the conversations Paul Berliet subsequently had with International Harvester, John Deere, Mack, and Caterpillar also led nowhere. The Lyon-based company found itself with its chronic underinvestment and overstaffing."

"Volvo’s then-CEO PG Gyllenhammar, who for many years was considered Sweden’s most powerful person, was one of those who bought into this reasoning. Among other things, he added the food company Procordia and the pharmaceutical company Pharmacia to his automobile business. A group like the forestry company Stora owned Swedish Match, which in turn not only produced matches, but also building materials, flooring, cardboard, and machines for fish gutting. Nokia manufactured such diverse products as televisions and rubber boots."

"What he means is that there has previously been a lack of large owners outside the stock market. And if a listed company succeeds in selling off divisions that do not belong to its core business, management can concentrate on what it does best and increase investment and profitability there. Experience shows that with the right owners, these sold divisions can develop and grow significantly more than they would have within the old group. But it is a matter of judgment what belongs to the core. Volvo sold its subsidiary Huskvarna’s sewing machines to IK, but diapers remained for the time being in SCA."

"The 2008 global financial crisis provided Chinese capital with the opportunity to acquire quality assets worldwide. In the automotive industry, there were numerous cross-border acquisitions, such as Nanjing Automobile Group acquiring the British Rover, Shanghai Automotive Group acquiring South Korea’s SsangYong, and BAIC acquiring Sweden’s Saab. The most famous of these was Geely’s acquisition of Volvo."

"Ten years later, Lan Shizi’s creative researchers conducted in-depth interviews with dozens of senior executives from Geely and Volvo from Hangzhou to Gothenburg, and published this book “The Era of New Manufacturing,” attempting to answer the previous three questions through the changes in Li Shufu and Geely."

"Li Shufu was born in 1963 in southern Zhejiang. It is said that the adventurous gene naturally flows in the blood of the local people."

"A successful businessman is good at discovering and exploiting market opportunities, acting with foresight and pursuing profits, carefully calculating risks and rewards"

"An entrepreneur is different; they are more focused on a particular career and persistently pursue it."

"Around 1997, more than eight private enterprises in Zhejiang and Jiangsu provinces alone proposed car manufacturing strategies. Others left themselves a way out, making car manufacturing a “big bait” while not giving up their original industries, hoping to gain government support and bank favor. Only Li Shufu was the most “crazy” and “foolish.” Once he mentioned car manufacturing, he put all his life’s worth on the line without any distractions."

"When Li Shufu put all his eggs in the “car manufacturing” basket, he was no longer an ordinary businessman; he was learning to be an entrepreneur."

"Starting in 2002, Li Shufu had been eyeing Ford’s Volvo. After several twists and turns, he finally achieved his wish eight years later. Li Shufu’s acquisition introduced him and Geely to the world. The changes brought to Geely by this acquisition were evident. Volvo’s three factories, more than 10,000 patents, and complete technology research and development system could feed back into Geely’s tech R&D, forming a balanced product line and complete manufacturing system. The change brought to Li Shufu can be described as “impact.” Volvo’s supply chain, employee training system, safety test center, large-scale testing grounds, and global sales and service network taught Li Shufu to use global business thinking, experiencing the art and wisdom of management in the conflicts and integrations of different cultures."

"The changes brought to Geely by this acquisition were evident. Volvo’s three factories, more than 10,000 patents, and complete technology research and development system could feed back into Geely’s tech R&D, forming a balanced product line and complete manufacturing system. The change brought to Li Shufu can be described as “impact.” Volvo’s supply chain, employee training system, safety test center, large-scale testing grounds, and global sales and service network taught Li Shufu to use global business thinking, experiencing the art and wisdom of management in the conflicts and integrations of different cultures."

"This signifies that six years after Geely’s acquisition of Volvo, Li Shufu successfully built a global automotive manufacturing and supply chain system. Håkan Samuelsson, president of Volvo Car Group, believes that “China’s automotive industry has entered a new era of globalized production and export initiated by Volvo.”"

"“In 2000, I first met Li Shufu when we participated in the ‘Dialogue’ program. At that time, Li Shufu said he wanted to build cars in China, which drew scorn from the audience. They didn’t trust him because he was originally selling motorcycles and was a private entrepreneur, while there were so many large companies involved in car manufacturing in China. Li Shufu adamantly said he would build cars, earning the nickname ‘Car Madman’.” Liu Chuanzhi, a longtime friend of Li Shufu and a representative of Chinese enterprises moving overseas, said at the 2015 launch of the new Volvo XC90."

"> We carved a stone of hope out of the mountain of despair. —Martin Luther King “I Have a Dream”"

"At that time, the car called “Pride” had obvious patchwork traces: the front looked somewhat like a Mercedes, the body and chassis somewhat like a Xiali, the engine was purchased from Xiali, and the gearbox came from Fiat’s hatchback car. In any case, the car was made, and Li Shufu was very excited, sending out over 700 invitations nationwide, arranging 100 banquet tables, and hanging banners saying “Manufacturing cars that the people can afford” and “Warmly welcome the leaders to inspect Geely” on the streets of Linhai, where Geely is located, anticipating the arrival of guests."

"“We have not failed Ford’s trust!” Li Shufu always appreciated Ford’s broad-mindedness and sense of responsibility as a giant in the global automotive industry. Li Shufu knew that money alone could not buy Volvo, and he valued Ford’s trust in him. International media have likened Li Shufu to China’s Henry Ford. As founders of their respective automotive brands, Henry Ford was born in 1863, and Li Shufu in 1963. Interestingly, Geely was founded in 1986, and 100 years earlier, in 1886, the automobile was invented by the Germans."

"In the sluggish automotive market of 2015, the transformation battle began with the “attack from below” by the Borui model, ushering in Geely’s 3.0 era of premium vehicles. Interestingly, compared to the 22% sales decline in 2014, a year later, Geely Automobile led the self-owned brands with a 22% year-on-year sales increase. For An Conghui, president of Geely Automobile, who directed this turnaround, “2 million vehicles in 2020” is only Geely’s baseline."

"Starting in 2002, Li Shufu had been eyeing Ford’s Volvo. After several twists and turns, he finally achieved his wish eight years later. Li Shufu’s acquisition introduced him and Geely to the world. The changes brought to Geely by this acquisition were evident. Volvo’s three factories, more than 10,000 patents, and complete technology research and development system could feed back into Geely’s tech R&D, forming a balanced product line and complete manufacturing system. The change brought to Li Shufu can be described as “impact.” Volvo’s supply chain, employee training system, safety test center, large-scale testing grounds, and global sales and service network taught Li Shufu to use global business thinking, experiencing the art and wisdom of management in the conflicts and integrations of different cultures."

"Following Li Shufu’s direction, it turned out the bamboo roots on the mountain had grown above ground in many places. Those in the know quickly explained to Li Shufu: “These bamboo roots need to grow underground for five years before emerging above ground, then they grow further from there.”"

"When a bamboo sprouts from the ground and enters the public’s view, we should know that it must have experienced harsh cold, the melting of ice and snow, gathering sufficient variables and potential energy."

"Through joint ventures, China’s passenger vehicle industry eventually formed the “Three Big, Three Small, and Two Mini” [[1]](#note1n) situation, which became insurmountable. On the positive side, joint ventures provided a lifeline for China’s auto industry amid dire shortages of capital and technology. However, from another perspective, they also exerted invisible pressure on newcomers."

"To many, Li Shufu had three obvious deficiencies in car manufacturing: First, he had only about 100 million yuan in cash. How could he enter an industry requiring huge investment? Second, Geely was involved in motorcycles with no accumulated experience in the automobile industry. Third, and more importantly, car manufacturing was considered a state endeavor. How could a private entrepreneur succeed without government support?"

"As the first private car enterprise, starting in 1997, Geely was determined to make good cars affordable for the average person. In 2007, Geely transitioned from price competition to leading in technology and performance. After acquiring Volvo in 2010, Geely began a second transformation, shifting from “Technological Geely” to “Quality Geely.”"

"Behind these words was the fact that the Chinese auto market exceeded 20 million in both production and sales, ranking first globally for five consecutive years. On the other hand, price cuts by joint ventures squeezed the survival space of independent brands, leading to an overall 16.24% year-on-year decline in the sales of self-owned brand vehicles. Geely Automobile’s sales fell by 22% year-on-year, the only decline in its 20 years of car manufacturing."

"ness. Besides the French investors in Paribas, Volvo of Sweden (through its Swiss subsidiary, Volvo Financial) had a stake in Paribas, as did Belgium’s Groupe Frere Bourgeois, headed by industrialist and fin¬ ancier Albert Frere, a man whose history much resembled that of Paul Desmarais."

"When Forsinvest was cleared of the majority of Volvo shares and had fulfilled its role for Pirre in the power struggle with Gyllenhammar, Forsinvest was put up for sale. I formed a consortium, including among others the investment company Hevea and Forsinvest's CEO Gunnar Ekdahl. We completed the acquisition and reached over fifty percent control. Wasatornet was the largest owner with twenty-six percent. The Wallenbergs remained with twenty percent."

"Additionally, a reasonably large institutional owner appeared in Boliden, Carlsons funds with the stock guru Björn Carlson. He argued that our purchase offer should have also included their Boliden shares. The argument was that Carlsons funds had been part of the placement solution when the Wallenberg family bought the Boliden shares from Volvo."

"In his twilight years, this great leader of Swedish industry had appointed Volvo's CEO Pehr G. Gyllenhammar as his de facto successor in distrust of his own son Peter, "Pirre" Wallenberg. The new succession was manifested by cross-ownership between companies in the Wallenberg sphere and Volvo with related companies, which came to include the Wallenberg bastions Atlas Copco and Stora Kopparberg. But after the father's death, Pirre regained the initiative and, among other things, bought the majority of Forsinvest with the large Volvo holdings, in open confrontation with PG Gyllenhammar."