Today’s Pickup: AB Volvo seeks to drop board member following Geely investment in Daimler

Good day,

Chinese automotive giant Geely has acquired a 9.7% stake in Daimler AG for $9 billion, hoping to leverage Daimler’s technological expertise, particularly around autonomous driving and electric vehicles.

The agreement, though, is causing concern in truck circles as Geely, owner of Volvo Cars, now holds a stake in Volvo Trucks’ chief rival. Hakan Samuelsson, chief executive of Volvo Cars, has been a board member of AB Volvo, Volvo Trucks parent company. He is not being offered for re-election, the board said in a statement.

“The reason that Hakan Samuelsson is not proposed for re-election is the announcement that Geely Group has become the largest shareholder of the German vehicle manufacturer Daimler, one of the Volvo Group’s major competitors,” the AB Volvo election committee said.

Geely acquired 8.2% of AB Volvo in December.

Germany, meanwhile, is looking at the Geely deal with Daimler amid concerns about Chinese investment in the country. Economy minister Brigitte Zypries did not say the country opposed the deal, but told the business newspaper Handelsblatt that investors need to follow rules and that Germany’s free-market system must “not be used as a gateway for other countries’ industrial-political interests.”

Did you know?

Juan Pablo Castanon, the head of the Mexican chamber of commerce, said that negotiators have reached agreement on 3 items out of about 30 in NAFTA talks as a March deadline approaches.

Quotable:

“Implementing congestion pricing would encourage only consumers with high valuations to use highly congested roads during peak demand times, improving efficiency but also potentially making some drivers worse off, particularly low-income drivers who may be priced out of the tolled lanes.”

– The Economic Report to the President on potential infrastructure funding solutions

In other news:

Used market could become swap meet

The market for used equipment could heat up thanks to the big tax breaks for companies that purchase equipment in 2017. (Wall Street Journal)

Refrigerated shippers turning to the rails

As truck capacity continues to tighten, more shippers of refrigerated goods are turning to the rails to move goods. (Journal of Commerce)

Container shipping could drop in 2018

A new report says that container shipping may drop in 2018 from 2017 levels, yet still remain fundamentally strong with 4% to 4.5% growth. (The Loadstar)

NAFTA talks likely to continue

The original March deadline for NAFTA talks appears unlikely to be met, but negotiators are preparing for talks to continue for some time. (Bloomberg)

Economy could overheat, driving up inflation

FTR economist Steve Graham runs down some of the latest economic indicators, including the possibility that a too-strong economy might drive up inflation concerns. (FTR)

Final Thoughts

NAFTA negotiators have reportedly reached agreement on three issues out of about 30 in talks that have dragged on for nearly a year. Another 5 to 7 issues could be settled in the next round, says Juan Pablo Castanon, head of the Mexican chamber of commerce, but most of the thorniest issues remain.   

Hammer down everyone!

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