VOLVO MAY DUMP MITSUBISHI DEAL
STOCKHOLM, Sweden — Volvo may not go ahead with a broad commercial-vehicle joint venture with Mitsubishi Motors now that DaimlerChrysler has a controlling stake in the Japanese company.
In a series of briefings with analysts this week, Leif Johansson, Volvo chief executive officer, said senior Volvo executives are pessimistic about prospects for creating the new truck and bus company with Mitsubishi.
Volvo is worried DaimlerChrylser, which owns Freightliner LLC, could wind up controlling the bus and truck joint venture if it exercises its option to buy Mitsubishi in 2004.
Volvo is supposed to buy a 19.9 per cent stake in the joint venture with Mitsubishi in July, for about US$500 million.
“Volvo needs a clarification of Mitsubishi’s future ownership structure; if they don’t have it, they won’t pay for the 19.9 per cent,” one official close to the discussions told reporters.
For its part, DaimlerChrysler has said it will honor the existing agreement, signed in October 1999. Notably, it has refused to discuss its further plans about Mitsubishi.
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