Volvo CEO wins breathing space as chairman denies seeking replacement

[kscarbel2]

Reuters / March 26, 2015

Volvo's CEO Olof Persson appeared to have won some breathing space on Thursday after recent criticism of the Swedish truck maker's performance but he needs to show progress over the next year to placate investors.

Volvo's chairman Carl-Henric Svanberg on Wednesday denied a newspaper report that he was actively looking for a replacement for Persson, who has led a drive to boost profitability since taking over in 2011.

At the time, Persson pledged to increase profit margins by 3 percentage points by the end of 2015, but the target is looking increasingly out of reach.

Last year, Volvo's margin fell to 2.1 percent, far below the 8.7 percent it stood at before the start of the efficiency scheme.

Analysts expect Volvo, which has been locked in battle with Daimler (DAIGn.DE) and Volkswagen's (VOWG_p.DE) truck brands for market leadership, to reach an operating profit margin of 7.1 percent by the end of 2016, Thomson Reuters data shows.

Activist fund Cevian, the second biggest owner of the firm by votes, had called for it to end 2014 with a double digit margin.

A partner at an asset management firm with stakes in Volvo who declined to be identified said he still had confidence in Persson, and that there had been some unfair criticism of him.

"But if you ask me in a year and much still hasn't happened within the company, then he's probably in a worse position," he said.

Since 2011, the Swedish firm has spent heavily on new model launches and to comply with tougher emission rules, while contending with weak demand in Latin America, a lackluster European recovery and a deep fall in demand for construction equipment in China.

Persson said in February the efficiency drive aimed at saving 10 billion crowns ($1.15 billion) was going "according to plan".

Volvo has underperformed peers such as Volkswagen's Scania and U.S. truck maker Paccar whose more nimble production structure have them left better able to cope with swings in demand and adjust output.

Since Persson took the helm in September 2011, Volvo shares are up around 34 percent compared with a nearly 75 percent gain in the STOXX Europe 600 Industrial Goods & Services Index .SXNP and a more than 135 percent rise for German rival Daimler.

Shares were down 0.95 percent at 1103 EDT, while the broader Stockholm share index .OMXS30 fell 1.4 percent.

Volvo’s four biggest owners were not immediately available for comment.

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[kscarbel2]

Setback for Volvo in MD-hunting

Dagens Industri / March 27, 2015

Volvo's Board has suffered a setback in efforts to recruit a successor to CEO Olof Persson. It is uncertain whether the main candidate will now take job, this according to well-placed sources.

According to new information, the situation has now changed causing a notice from Volvo to probably delayed. The reason being that the Volvo Board headed by Chairman Carl-Henric Svanberg had advanced discussions with a major candidate who now appears to be about to pull out of the recruitment process.

The main candidate was hesitant after having had conversations with their current employer who was not prepared to allow the candidate to become CEO of Volvo.

Reuters reported last night that Volvo's chairman Carl-Henric Svanberg was denying last week's media reports that the company wants to replace Olof Persson as CEO.

The extremely brief comments from Carl-Henric Svanberg should be measured against the fact that a board officially always give unqualified support to its CEO until he/she has been relieved.

[Dirtymilkman]

Wouldn't it be great if a company decided to build quality trucks and build what the people want instead of trying to appease shareholders. I bet even when Volvo was founded they wanted to build a quality product and make a little money doing it. Now its all about the stock