The Volvo Group has removed Olof Persson from the role of president and CEO of the company. This move came following pressure from certain shareholders due to the group’s weak financial performance in recent years. Instead the Volvo group plans to appoint Scania’s head Martin Lundstedt to the role. Lundstedt will take the post in October 2015, with the Volvo Group’s chief financial officer, Jan Gurander, standing in as temporary president and CEO. Lundstedt and Gurander previously worked together at Scania.
Starting in 2012, Volvo Group has cut jobs and realigned production, with products ranges being cut from the Volvo Construction Equipment line-up for example. Truck brands have also been streamlined following a string of acquisitions some years ago. The US$1.15 cost-cutting programme has delivered savings but has failed to deliver the necessary improvement in financial performance, with the result that Persson is now being replaced.
Lundstedt has headed Scania since 2012 and is considered to have a greater experience of the automotive sector, an industry crucial to the Volvo Group’s overall operations.
“After three years of focus on product renewal, internal efficiency and restructuring, the Volvo Group is gradually entering a new phase with an intensified focus on growth and increased profitability. This will be achieved by further building on our leading brands, strong assets and engaged and skilled employees all over the world“, said Carl-Henric Svanberg, chairman of the board of AB Volvo. “Martin Lundstedt has 25 years of experience from development, production and sales within the commercial vehicle industry. He is also known for his winning leadership style.”
“Olof Persson has with energy and determination carried out an extensive change of the Volvo Group,” said Svanberg. “He has focused Volvo on commercial vehicles and sold unrelated businesses and assets to a value of over SEK 20 billion. He introduced a functional organisation and paved the way for cost savings of SEK 10 billion. He also concluded the agreement with one of China’s largest truck manufacturers, Dongfeng and led the company during the largest product renewal in the Group’s history. Today the Volvo Group is considerably better positioned to compete for leadership in our industry.”
Persson previously worked at ABB, AdTranz, Daimler-Chrysler and Bombardier. His first role within the Volvo Group was as president of Volvo Aero in 2006, followed by a move to head Volvo Construction Equipment in 2008. He became president and CEO of the whole Volvo Group in 2011.