Volvo No Longer Run by a Swede

Posted by: David Kiley on September 2, 2008

Ford appointed Stephen Odell, one of Ford Motor’s top executives in Europe, to run its Swedish Volvo unit, replacing Fredrik Arp.
Arp, who came to Volvo three years ago from his job as CEO of Swedish auto parts supplier Trelleborg, was at the end of his three-year contract, and was known to be disenchanted with the job, especially after Ford shopped Volvo around last year.

Ford is believed to be ready to hold on to Volvo with no viable buyers at the counter. In many ways, it’s a natural for O’Dell to take the post. Since Ford has all but dissolved the Premier Auto Group, which had included Jaguar, Land Rover and Aston Martin, as well as Volvo, Ford Europe chief Lewis Booth’s job has become more focused on Ford brand. And O’Dell, his number-two, had a limited portfolio of responsibility.

Odell will be responsible for Volvo’s global operations out of its headquarters in Gothenburg, Sweden.

Ford is aggressively seeking ways to cut costs at Volvo, while further integrating its engineering and supply chain into Ford’s. Volvo lost money the last two years. Ford is also exploring manufacturing Volvos in the U.S. as a hedge against the weak dollar, which is hurting Volvo’s pricing and profits.

In the second quarter, Volvo reported a pre-tax loss of $120 million (about 83 million euros), compared with a loss of $91 million a year ago. The automaker’s second-quarter sales fell to $4.3 billion from $4.4 billion during the same period in 2007.

Arp was seen more as an administrator than a “car guy” at Volvo. Two Volvo executives told me by e-mail that they were much more enthusiastic about O’Dell than Arp.

Three years ago, Ford felt it was still necessary, for cultural reasons, to appoint a Swede to succceed Volvo’s long-time chief Hans-Olov Olsson. Ford no longer sees that as a necessity.

Reader Comments

Dearborn Observer

September 2, 2008 5:08 PM

The placement of a non-Swede as Volvo's CEO is just one of many more Volvo sacred cows to fall. Once the other PAG brands fell by the wayside, and with the increasingly important role of Mazda and Ford of Europe in Ford's future product plans, Volvo's raison d'etre evaporated, especially as the S80-based Ford products die-off. So here's the next sacred cow: does the whole notion of a Swedish car even make sense anymore? One look at both Volvo and, especially, Saab's cratering global sales and you have to say - maybe not. If both brands died tomorrow, perhaps the only people that would really miss them would be the immediate residents of Gothenburg, Trollhattan, Berkeley, and Cambridge, MA!

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