Volvo scraps COO post in management reshuffle

Volvo Cars has removed its chief operating officer post in a realignment of management roles at the company, President & CEO Stefan Jacoby announced on Tuesday.

Volvo scraps COO post in management reshuffle
New Volvo Cars SVP for China operations Freeman Shen

The previous COO, Steven Armstrong, will return to former owner Ford of Europe, based in Cologne, Germany.

After eliminating the position of an operative head for the company’s industrial operations, the senior vice presidents for product development, manufacturing, purchasing and quality will now report directly to Jacoby. In addition, the head of special vehicles will also report directly to him.

“It’s essential to extend the executive management team in order to speed up the decision making process and to make well-founded business decisions. This will ensure that everyone is focused on the key issues and it will increase necessary transparency,” said Jacoby in a statement.

Separately, Volvo has appointed Freeman Shen, an executive at Zhejiang Geely, Volvo’s parent company, as senior vice president for Volvo Cars’ China operations. He will be responsible for both the industrial and the commercial part of the business.

Intensive work is currently under way ahead of an announcement in the near future about the future direction for Volvo China and upcoming investments in the Chinese market, the company said in a statement.

Shen has served as a close advisor to Volvo Chairman Li Shufu. Shen, who has previously studied and worked in the US, was the CEO of Fiat Powertrain Technologies China from 2007 to 2009 before joining Geely in December as vice president of its overseas business.

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Sweden’s Volvo regains strength after pandemic puts brakes on earnings

Swedish truck maker Volvo Group was hit by a sharp drop in earnings due to the coronavirus pandemic, but business rebounded at the end of the year.

Sweden's Volvo regains strength after pandemic puts brakes on earnings
Volvo Group CEO Martin Lundstedt. Photo: Adam Ihse/TT

In 2020, the group saw “dramatic fluctuations in demand” due to the Covid-19 pandemic, chief executive Martin Lundstedt said in a statement.

For 2021, Volvo raised its sales forecasts in its trucks division – its core business – in Europe, North America and Brazil.

However, it said it also expected “production disturbances and increased costs” due to a “strained” supply chain, noting a global shortage of semiconductors across industries.

The truck making sector is particularly sensitive to the global economic situation and is usually hard hit during crises.

In March, as the pandemic took hold around the world, Volvo suspended operations at most of its sites in 18 countries and halted production at Renault Trucks, which it owns, in Belgium and France.

Operations gradually resumed mid-year, but not enough to compensate for the drop in earnings.

With annual sales down 22 percent to 338 billion kronor (33.4 billion euros, $40 billion), the group posted a 46 percent plunge in net profit to 19.3 billion kronor (1.9 billion euros).

Operating margin fell from 11.5 to 8.1 percent.

However, the group did manage to cut costs by 20 percent.

“We have significantly improved our volume and cost flexibility, which were crucial factors behind our earnings resilience in 2020,” the group said.

Volvo's business regained strength in the second half of the year.

“Customer usage of trucks and machines increased when the Covid-19 restrictions were eased during the summer and this development continued during both the third and fourth quarters,” it said.

“Both the transport activity and the construction business are back at levels on par with the prior year in most markets.”

For the fourth quarter alone, the company reported a 38-percent rise in net profit from a year earlier.