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Changes to Volvo’s Group Executive Board and truck organization with clearer commercial accountability

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Volvo Group Press Release / January 27, 2016

The Volvo Group is introducing a brand-based organization with clearer commercial accountability for the Group’s various truck brands.

Four separate units will be created: Volvo Trucks, UD Trucks, Renault Trucks and Mack Trucks, each with profit and loss responsibility for their respective business.

Volvo’s Group Executive Board will be changed to include representatives from some of the Group’s business areas.

“This is an important change in how we conduct our truck business, with an expanded mandate for our sales organizations to control and develop their businesses with an explicit responsibility for profitability and organic growth,” says Martin Lundstedt, President and CEO of Volvo. “We will gain a simpler organization in which decisions are made more quickly and in closer cooperation with the customer, while each truck brand will be represented on the Group Executive Board with shared responsibility for optimizing Volvo Group’s overall truck business.”

After several years of growth through acquisitions, followed by major restructuring programs and cost savings, the Volvo Group is now gradually entering a new phase with more intense customer focus and focus on organic growth and improved profitability.

“The efforts in recent years to realize synergies between our various brands have yielded results and created the possibility to now make the Volvo Group the most desired transport solution provider in the world,” says Martin Lundstedt. “The goal of the new governance model is for all of the Group’s business areas to be driven along the same distinct business principles, whereby each area can follow and optimize its own earnings performance in both the short and long term.”

The Group’s technology and product development organization and production organization for trucks will remain responsible for common development and production. In addition, specific resources will be allocated to each brand. At the same time, purchasing for the truck operation will form a separate unit and will join the Group Executive Board. These organizational changes will not have any planned effect on the number of employees in the Group.

The new organization will come into effect on March 1, 2016, when the Volvo Group will comprise ten business areas:

Volvo Trucks, UD Trucks, Mack Trucks, Renault Trucks, Value Truck & JV:s, Volvo Construction Equipment, Volvo Buses, Volvo Penta, Governmental Sales and Volvo Financial Services.

From March 1, 2016, Volvo’s Group Executive Board will comprise the following members:

Martin Lundstedt, President and CEO
Jan Gurander, Deputy CEO and CFO
Claes Nilsson, Volvo Trucks
Joachim Rosenberg, UD Trucks
Bruno Blin, Renault Trucks
Dennis Slagle, Mack Trucks
Martin Weissburg, Volvo CE
Torbjörn Holmström, Group Trucks Technology
Mikael Bratt, Group Trucks Operations
(Under recruitment), Group Trucks Purchasing
Sofia Frändberg, Group Legal & Compliance
Kerstin Renard, Group Human Resources
Henry Sténson, Group Communication & Sustainability Affairs

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Volvo Group's Lundstedt Reorganizes Company

Transport Topics / January 27, 2016

Approximately 100 days into his tenure as CEO of Volvo Group, Martin Lundstedt announced changes in the Sweden-based manufacturer that emphasize brand names over market geography.

In a Jan. 27 conference call and press statement, Lundstedt, formerly CEO of Scania Group, said he is creating a “mandate for our sales organizations to control and develop their businesses with an explicit responsibility for profitability and organic growth.”

The truck maker’s heavy-duty North American operations, Volvo and Mack Trucks, will be more separate starting March 1. Dennis Slagle will remain a member of Volvo Group’s executive board but only as the head of Mack’s worldwide sales.

Slagle has been in charge of Volvo and Mack in North America, with Mack President Stephen Roy and Volvo President Göran Nyberg reporting to him. Slagle and Roy will remain together at Mack, which has headquarters in Greensboro, North Carolina, as does Volvo in North America.

Nyberg will stay in the United States, and his new boss will be Claes Nilsson, the global chief of Volvo Trucks, based in Gothenburg, Sweden.

Volvo Group’s two other major truck brands are UD Trucks, originally Nissan Diesel, which no longer builds new vehicles in North America, and Renault Trucks, primarily a European manufacturer.

While Volvo Group is emphasizing responsibility for its brand divisions, the company also has three truck group segments that will provide services for the four big brands: technology, purchasing and operations.

The company also makes construction equipment, buses and marine and specialty engines.

Olof Persson was Volvo Group CEO until April of last year, when he was dismissed by the corporation’s board. Chief Financial Officer Jan Gurander took over on an interim basis, but Lundstedt was picked as the permanent replacement with an October starting date.

Reports at the time of Persson’s dismissal said some of Volvo’s major shareholders wanted new management that would streamline operations and increase profits. After 100 days in charge, Lundstedt unveiled his changes and Gurander is CFO and deputy CEO.

“We will also make sure that the brands will get the stronger voice in developing and adapting our customer offers when it comes to the product development, but still using the leverage of having a global product development organization," Lundstedt said during the call. "But I also want to be clear here, it means also a very strong responsibility, that each brand will stand on its own commercial and profitability merits going forward, in both the short and the long term.”

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Volvo Group to reorganize truck businesses

Fleet Owner / January 27, 2016

Volvo Group plans to reorganize its global truck operations into four separate units – Volvo Trucks, UD Trucks, Renault Trucks and Mack Trucks – starting on March 1 this year, giving each profit and loss responsibility while shuffling its executive board to include representatives from those units.

“This is an important change in how we conduct our truck business, with an expanded mandate for our sales organizations to control and develop their businesses with an explicit responsibility for profitability and organic growth,” noted Martin Lundstedt, president and CEO of Volvo, in a statement

“We will gain a simpler organization in which decisions are made more quickly and in closer cooperation with the customer,” he explained. “Each truck brand will also be represented on the group executive board with shared responsibility for optimizing Volvo Group’s overall truck business.”

Lundstedt said those efforts are in response to a “new phase” the company is entering, one demanding “more intense customer focus” plus organic growth and improved profitability.

“The goal of the new governance model is for all of the group’s business areas to be driven along the same distinct business principles, whereby each area can follow and optimize its own earnings performance in both the short and long term,” he emphasized; a new direction required after “several years of growth through acquisitions,” followed by major restructuring programs and cost savings, Lundstedt pointed out.

He noted that Volvo’s technology and product development organization and production organization for trucks will remain responsible for common development and production, while “specific resources” will be allocated to each brand.

At the same time, purchasing for the truck operation will form a separate unit and will join the group executive board, though Lundstedt stressed those moves will “not have any planned effect on the number of employees” within the Volvo Group.

“In the short term, this won’t be experienced by customers as a major change here in North America,” John Mies, VP-communications for Volvo Group North America, told Fleet Owner.

“Organizationally, it means that Göran Nyberg will continue to lead the North American commercial organization for Volvo Trucks, but will now report to Claes Nilsson, the new global president of Volvo Trucks, rather than to Denny Slagle,” he said.

“In the longer term, the reorganization will benefit customers by allowing the Volvo Group to combine the best of two worlds: synergies by having global organizations for manufacturing and product development, combined with clear leadership and responsibility for each brand, to ensure that customer needs are understood throughout the entire organization,” Mies noted.

Once the reorganization is complete, Volvo Group will be comprised of 10 total business units: the four aforementioned truck units (Volvo Trucks, UD Trucks, Mack Trucks, and Renault Trucks) along with Value Truck & JV:s, Volvo Construction Equipment, Volvo Buses, Volvo Penta, Governmental Sales and Volvo Financial Services.

Volvo’s reshuffled executive board will be eventually comprised of 13 executives, with its “group trucks purchasing” position currently unfilled. Those executives are:

Martin Lundstedt, president and CEO

Jan Gurander, deputy CEO and CFO

Claes Nilsson, Volvo Trucks

Joachim Rosenberg, UD Trucks

Bruno Blin, Renault Trucks

Dennis Slagle, Mack Trucks

Martin Weissburg, Volvo CE

Torbjörn Holmström, Group Trucks Technology

Mikael Bratt, Group Trucks Operations

Sofia Frändberg, Group Legal & Compliance

Kerstin Renard, Group Human Resources

Henry Sténson, Group Communication & Sustainability Affairs

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Volvo builds on the truck business

Goteborgs-Posten / January 28, 2016

Martin Lundstedt comments on his new changes for Volvo Group.

From March 1, Volvo Group is introducing a brand-based organization with clearer commercial accountability for the Group’s various truck brands.

Four separate units will be created: Volvo Trucks, UD Trucks, Renault Trucks and Mack Trucks.

Each unit will have profit and loss responsibilities, and it also will require group management changes.

“Starting from the customer's perspective, it is our brands and the people who work with them, which they do business with. Then we want to ensure our commercial organization for brands with a clear profit responsibility, developing responsibility and increase the opportunity for decentralization and capacity to operate each of the stores. And we have very strong brands,” says Volvo CEO Martin Lundstedt.

Volvo Group's truck brands are stronger in different markets. The Volvo and Renault brands are sold in Europe, Volvo and Mack in North America, and UD Trucks in Japan.

Question: This means that Volvo Trucks and Renault Trucks will fight with each other for market share in Europe?

“To begin with, I want to be a little humble and say that our competitors hold a sizeable amount of market share. It's been almost 15 years since Volvo acquired Renault, so we have developed a clear strategy for the various brands and how to be successful. And there is an ability to strengthen both brands in this way. In some cases, it will be that you try to win customers, but there is less risk in relation to the upside as we have,” he says.

“Volvo puts a strong focus on local sales and service and it is clearly stated that every truck brand to stand their own feet economically.”

“There are both technology, manufacturing and logistics systems where there is a strength in that it is a group and can split expenses, knowledge and technology. And then there is one important part that is local and regional where they do business.”

“We're business to business, and sell production and availability, and it is not just a relationship that is about sales. In many cases, you build a lifelong relationship with the customer. And there is a lot that we can take decisions and develop our solutions together with customers and still have the global strength,” says Martin Lundstedt.

“I am convinced that this is a better way which will highlight the best of each brand.”

How will the changes affect staffing?

“There are no plans for it to be some personal effects. It is not that purpose.”

Having reached your 100th day as CEO of the Volvo Group, how has it been?

“Incredibly fun and inspiring. We have a great bunch of customers and employees. I'm still in the phase when I go to bed at night one feels that it is unnecessary to have to sleep for six hours before getting off and running again.”

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How can you have a competitive product between the divisions if all the vehicles are built on the same platforms. I would think one way to beat this problem would be to offer more vendor options in order to make the product lines more distinct.

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I wonder what Mack will do with more independence. ? I wonder how long of a leash lundstedt will give them

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This is the largest development to happen to the Mack name since Volvo acquired it. And yet, very little response from BMT members. Interesting.

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We've become quite distrustful of Volvo= We'll believe it when we see it!

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This is the largest development to happen to the Mack name since Volvo acquired it. And yet, very little response from BMT members. Interesting.

looks good on paper/talk is cheap. Give it 6 months to start to see changes due to "inbreeding"

If as was stated, it allows MACK to be more independent, it will be a big plus. a real truck with a hood maybe/

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We've become quite distrustful of Volvo= We'll believe it when we see it!

Mack should still be an American company. The U.S. government should have disallowed Volvo's purchase of Mack, and supported Mack's survival, just as it has the Big 3 automakers for years. If the Big 3, and the banks on Wall Street, are "too big to fail", then why not America's truck industry that carries our economy on its back 24/7 ???

Having said that, Martin Lundstedt is giving Volvo a total reboot !

The dysfunction Volvo culture of the last couple of decades is being torn up and thrown in the waste basket, and the Scania management philosophy is being introduced. This means the Mack brand, albeit under foreign ownership, has a chance to grow again.

I personally believe leadership changes at the Mack brand are a must, in order for the Mack brand to benefit from the new structure. The Mack brand has been given a clean sheet of paper, but the top two cogs...................As Zenon C.R. Hansen would say, "we need to dispense with the present management and get others who know something about trucks!"

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MACK trucks are gone other than by name. With the new cab from Volvo there is not much left. I don't see much difference between a Mack and a Volvo now, If they wanted to bring Mack engineering and design and let them build back a Real Mack truck, otherwise when the new cab comes just put the Volvo name on and change the name on the rear ends and manual transmission to Volvo brand. This has been a slow death for Mack.

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OK, so what if Mack decides to do their own new cab, do a deal with Scania to share engines and build them at the Mack powertrain plant, and make the Mack drivetrain standard and drop to Volvo transmission options... Wonder how long that'd last in the boardroom?

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The Group’s technology and product development organization and production organization for trucks will remain responsible for common development and production. In addition specific resources will be allocated to each brand.

1. Common development means common platforms. Where is the difference that will separate Mack from the crowd?

2. Specific resources will be alocated to each brand. What does this mean? Macks own cab? Cummins diesel option? New hoods? New sleepers? Eaton? Fuller?Allison?

Keeping Mack rears suspensions and transmissions? Independence like Austrllia?

:clock_logo:

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In 1999, Volvo wanted to merge with Scania. It made sense from a business point, however European authorities felt it would create an unacceptable monopoly in some markets. Failing to get approval, Volvo instead acquired Renault's truck unit (RVI) and hence Mack Trucks !

Now as you all know, Volkswagen is in deep trouble. They need an estimated US$48 billion to pay the consequences of their emissions cheating software scandal in the US market alone. Altogether, it could cost them around US$90 billion. And they don't have it. After groveling to no less then 13 banks, all they could get was US$21.1 billion.

VW needs to sell something of value that they'd be willing to part with. Nobody will buy Bentley, Ducati or Lamborghini in a down economy. Nobody will buy a money loser like SEAT. And they can't entice anyone to buy MAN because, like the VW brand, it's barely profitable.

Logically speaking, the only business unit that VW could/would part with that can yield the money they desperately need is (drum roll here)............Scania.

There is the distinct possibility that previous Scania stockholders, Investor AB and/or the Wallenbergs, would buy Scania back. In that case, Martin Lundstedt would certainly explore finding synergies between the two companies. When it comes to engines, Martin knows first-hand that Scania designs the most advanced powertrains in the world. Meanwhile, the Volvo engines are aging.......ongoing tweaks are having less effect.

There's also the possibility that Volvo, supported by its investors, would buy Scania from Volkswagen, pending regulatory approval. That would result in a marriage bringing Scania's leading edge expertise to Volvo, including powertrains like the legendary V-8.

Now this is NEWS.

It seemed like yesterday when Volkswagen was FarFromPukin'..... a bankable brand like no other.

Who would have guessed the emission scandal could lead to >>>>>>> ah, never mind.... it won't happen.

As far as the Volvo announcement, if it somehow results in lower parts prices, thats my only interest.

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OK, so what if Mack decides to do their own new cab, do a deal with Scania to share engines and build them at the Mack powertrain plant, and make the Mack drivetrain standard and drop to Volvo transmission options... Wonder how long that'd last in the boardroom?

The Scania philosophy is to listen to the customer and provide him/her with the most profitable business solution.

If the Mack dealer body demands their own brand proprietary cab, and provides a convincing argument, Martin Lundstedt will give it full consideration.

Likewise for making the 16.4-liter Scania V-8 a factory option.

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Wouldn't that be nice a mack with a V8 again. A titan powered with a V8 in a logging truck. Canadian road trains etc. etc.

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does this mean the people at Macungie will start giving a shit how the truck leaves the plant .

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So will Mack be able to build and test their own prototypes without volvos consent? Will they be able to design engines with other groups on joint ventures?

This could be a great thing. The Mack brand alone is worth more than all of Volvo's assets.

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