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Obama meeting will be Svanberg's toughest test

Obama meeting will be Svanberg's toughest test

Published: 14 Jun 2010 18:57 GMT+02:00
Updated: 14 Jun 2010 18:57 GMT+02:00

Carl-Henric Svanberg, 58, is chairman of a company presiding over a giant environmental catastrophe. President Barack Obama has said he has his ‘foot on the throat’ of BP. Yet last week, as the oil continued to flow, the Financial Times described the chairman as “lower-profile than an agoraphobic prairie dog.” He is even being spoken of as a BP shareholders’ preferred sacrificial lamb.

One anonymous BP source was quoted last week as saying: "Svanberg should have been there, along with chief executive Tony Hayward, and shown the world that BP is doing everything in its power to clean up this mess, offering to pay the necessary compensation and be BP's public face. He has failed them."

Now, though, the time for lingering in the background in over. Svanberg has been thrust into the limelight, with a summons to appear at the White House on Wednesday for a meeting with President Barack Obama.

Svanberg, who only formally took the reins at BP in January, remains a fairly anonymous figure in the US and the UK, where BP is based.

But in Sweden, where he was CEO of telecom equipment vendor Ericsson, Svanberg has been the country's most high-profile company leader of the past decade. For observers of his career, this makes his handling of the crisis rather puzzling. He is widely viewed as one of the Sweden’s most able business leaders and best communicators. His reputation in the US and the UK for being media-shy and unforthcoming is lightyears away from how he is perceived at home:

“He is very communicative, verbal and charismatic,” says Torbjörn Carlbom, telecoms reporter at Swedish business weekly Veckans Affärer.

“This is why the Swedish media are very puzzled by the way he is coming across in the current crisis at BP.”

It could even be said that Svanberg has been something of a hero in the Swedish media, both for his success in turning around Ericsson, Sweden's industrial crown jewel, and for his clubbable, easy manner.

A keen sailor and former amateur hockey player, he was brought up in Porjus, a village of 400 people in the extreme north of Sweden. He studied engineering at Linköping University, returning to university after his military service to study business administration and economics at Uppsala.

In an interview in 2006 he told of how his sister’s diabetes, which caused her to lose her sight, undergo a kidney transplant and a double foot amputation, had spurred him to “work for us both.” Despite his hard work, he is generally viewed as “a competent and nice chap,” according to Carlbom.

“Lots of people in the media have tried to find something wrong with him, but they haven’t.”

Svanberg divorced wife Agneta Skoog Svanberg last year, after 26 years of marriage and 3 children.

In business, Svanberg has been unusually successful. His first big job was as CEO of lock company Assa Abloy, where he increased profits from 50 million to 2 billion kronor in ten years.

His enviable reputation meant he was seen as an obvious saviour for Ericsson. When he joined the company in 2003, it had been subjected to a period of severe cutbacks. As the world’s largest telecoms equipment maker, it had been badly hit by the dotcom crash: mobile operators, stung by governments’ demands for billions of dollars in licence payments for 3G networks, had cut back drastically on their spending.

When Svanberg joined, the company had seen like-for-like sales fall by 31 percent in just one year and had made big losses in both 2001and 2002. The number of workers had been slashed: 107,000 people had worked for the company at the beginning of 2001; by the end of 2004 that number would be just 50,000. The ripple effects had been felt across the Swedish economy.

“He stepped in at a time when a lot had been done, but the company lacked self-belief. He worked hard to restore morale,” says Mats Bergström, telecoms analyst at Nordea.

Few CEOs or chairmen, including Svanberg, have had to go through a crisis of the magnitude of the disaster now facing BP. The most serious crisis for him at Ericsson was in 2007, when it issued a profit warning. The warning led shares in the company to fall by 25 percent:

“He handled that well, both internally and externally, although that was small beer compared to what he’s facing now - to say the least,” says Bergström.

Ericsson’s importance to Sweden means its CEO is always something of a political figure. In 2003, he wrote a newspaper article together with Foreign Minister Anna Lindh, calling on Swedes to vote in favour of euro membership in the upcoming referendum. The cosiness of the relationship between government and business was underlined when newspapers splashed snaps of Svanberg and Lindh air-kissing as they met to discuss the vote.

Svanberg also intervened in politics in 2006 to call for the then Social Democratic government to be voted out.

Torbjörn Carlbom points out that anyone working in a heavily-regulated sector like telecoms is used to close contact with government, where state companies often control telecom networks:

“He is very used to working with politicians, and to working with safety issues and corporate social responsibility.”

But Svanberg’s summons to the White House means he is now playing on unfamiliar political turf in the midst of a crisis - and the stakes could hardly be higher. For many this is his main chance to prove to the US administration that BP is capable of stopping the leak - and to prove to his own detractors that he is the right man at the top of BP.

James Savage (james.savage@thelocal.se)

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Your comments about this article

20:04 June 14, 2010 by shame, shame
nice article.
22:30 June 14, 2010 by tigger007
the story was good and had a bit of insight into Carl-Henric Svanberg. he may have been a great business leader in sweden,but in the usa and uk he would have been one of the run of the mill busniess leaders.Carl-Henric Svanberg should have been on the phones and in the media doing damage control for bp. being a great business leader in the uk and usa is far different in sweden. you have to be hard nosed business leader to suceed in the uk and usa business market!
00:44 June 15, 2010 by JoeSwede
BP is in a very difficult situation. His skill are important but I'd say the engineers who can cap the flow of oil are more important. Then comes the bill... escrow is what Obama wants. Multi-billions. You might as well turn the company over to the three coastal states now.
01:18 June 15, 2010 by Roy E
Too bad that Svanberg will have to suffer the clueless Obama clown trying to obscure his own abject failure of leadership in this disaster , but unfortunately it goes with the territory of being CEO and a a horrible accident occurring on your watch. Svanberg is a grown up. He'll handle it as best as one can expect. .
01:45 June 15, 2010 by dbeynch
You have to view this story from the angle that Obambo - who will never let a catastrophe go to waste - will use the oil leak as means to take control of the US energy industry. In other words he will attempt to nationalize the oil companies. This is of course totally in line with his efforts at "radically transform[ing] the American society" by introducing socialism according to the Greek financial model. Yes BP bears a lot of blame here, but even the most hardline liberal lefty can not really believe that BP created the accident on purpose. Obambo's skill set is limited to "community organizing", which is a meaningless talent in this context. Hence Obambo can be expected to only spew forth some well rehearsed marxist invective, without introducing real leadership. Hee needs this tragedy to further his own socialist goals.
01:59 June 15, 2010 by mojofat
Yes, clearly BP has played directly into Obama's hands on this one. For years Obama has been plotting a way to take over the energy industry in order to further his marxist agenda. How he so deftly orchestrated a rig explosion in the gulf of mexico is truly the work of a master here. Your analysis is brilliant.

It's an interesting position to see anyone take the side of the oil executives on this one. It's comically grotesque. You really feel bad for Svanberg? (BTW, he's not CEO...of course, facts never get in the way of a good rail against Obama does it?) I don't think his life has come to a complete halt because there's oil washing up on his beaches and killing everything within hundreds of miles. Meanwhile, BP continues to make billions in profit while the working people who actually live in the area are going broke and experiencing health problems related to the chemical dispersant.

BP did not create this "accident" through intention, only negligence, greed, and gross incompetence. The results are the same though. I hope BP has its ass nailed to the wall on this one. $10/gallon gasoline is worth it if it means we avoid these sorts of "accidents" in the future.

I'm curious what the armchair presidents would suggest be done? Suit up in a flight jacket and fly to the nearest aircraft carrier and declare mission accomplished? It's easy to be critical of someone, but I don't see any constructive thoughts in these comments.
02:17 June 15, 2010 by Hasting
There is no hope..Oil industry, people driving with their cars etc will kill everything on this planet. Are you proud of yourself?

http://www.masslive.com/news/index.ssf/2010/06/cap_on_gushing_bp_oil_well_onl.html
02:30 June 15, 2010 by tigger007
do any of you dusche bags has any proof that obama is a marxist?! if you was the president of the usa( thank god none of you are!!) what would you do!? @dbeynch america is it really that great as it is? some of you dusche bags need to keep your comments to yourselves. mojofat! are you funking for REAL!! do you really think that obama would really have a plan like the one you have mentioned in your comment!!! WHERE THE PROOF!!!
07:29 June 15, 2010 by gidgetoh
Nice to find what many Americans are thinking but afraid to say, on a Swedish news source, and it even wreaks with a bouncing Tigger comment from a White House mouth piece.
10:36 June 15, 2010 by cogito
@tigger007

Name-calling is always so persuasive. You forgot to say "poopy-head."

As for proof...how, exactly, does one prove--or disprove--Marxism?
14:14 June 15, 2010 by Marc the Texan
This situation will break BP, Svanberg and Hayward. They will all be broken.
14:14 June 15, 2010 by rufus.t.firefly
Clubbable? That seems to imply he is a person one would want to club. While it may be true, didn't you mean he is personable? Or maybe you refer to membership in certain private clubs?

This recital of his CV is hardly revealing. What is revealing is how badly he has behaved in this crisis. Many of his "accomplishments" seem closely linked to his connections and access to powerful individuals in both business and politics. There is a difference between being connected and being talented. Sometimes a crisis reveals that difference
14:47 June 15, 2010 by Audrian
Without exception, oil companies are polluters of the environment directly. In Nigeria, for example, they have destroyed the environment and the livelihood of the people of Niger Delta. Spilling oil, which has sipped into the drinking water, land and sea water, has crippled the local economy. The local population has been crying for help over thirty years none heeded. The Nigerian elite were in bed with the oil company, ignore the matter, so also the so called the "international world." The only agencies who answered the call were the environmentalists, who have been making noises. The oil giant began by saying there was no pollution. When it became visible it blamed the people for the spill.

Oil companies do not protect the environment because it is expensive to do so. They are interested in protecting their profit levels.

When it ignored technological faults with the drill in the Gulf Coast, BP miscalculated; the people in the US are not people from a banana state. They might be apolitical, but when pollution of this magnitude strikes, they rose up and turned against the president in anger. In desperation the pro-business president has no choice but punch BP in return. The Republican Party policy was, "drill baby drill." The environmental regulations put in place by President Clinton's administration were undone by President Bush, junior.
15:03 June 15, 2010 by cogito
More than a month after the disaster, Obama takes a break from vacations and golf to pretend he cares.

He has shown himself to be incompetent and clueless once again.

Or is he?

He waived required safety inspections of BP's Deepwater Horizon rig several times.

He has also been the number one recipient of BP money.

Cause or coincidence?
16:40 June 15, 2010 by Querist
Question: When a catastrophe hits Nordstream and Fenno-Scandinavia's waters are turned into a toxic wasteland - will anyone be laughing then?

.
17:08 June 15, 2010 by rufus.t.firefly
@cogito:

Where do you get the idea that Obama personally waived inspections? If you have a link to a reliable source about that, please share it.

You might well be correct about campaign contributions- it is public information and is easily checked. But waiving safety inspections- himself- I can't imagine something like that even coming to a President's attention absent the sort of catastrophe we now have.

@Querist:

This thing is still spewing- and traveling. There is every reason to believe it will get into the Gulfstream heading up north in the Atlantic, then...

There is certainly nothing funny about any of this!
17:13 June 15, 2010 by MTTRN
@tiger007 google Obama+Alinsky, see the proof yet?

Oh, and watch "The Obama Deception" on youtube, that could be a bit of an eye opener too.
18:20 June 15, 2010 by tigger007
i get so pissed when people say things on theories or halve truths do to prejudice!

america needs a change in it's social structure and i'm a capitolist! we spend 450 billion dollars in military hardware,but we can't educate or feed our poor. we spent 85 billion year in space projects(aint a damn thing on mars). why in the hell would a advanced race of people would wanna have contact with us?when we can't treat our own people on earth with respect?!
18:41 June 15, 2010 by cogito
@rufus

Of course presidents don't "personally" do anything. Obama in particular does little but talk, play golf and take vacations.

He had his sec'y of the interior grant the waivers to BP.

Since 24 hours after the explosion, 17 nations have offered help--providing ships outfitted with oil-skimming booms etc. 50 days into the disaster, he not yet given them an answer.
19:05 June 15, 2010 by rufus.t.firefly
@cognito

I looked into whether Salazar, Sec. Interior, granted waivers. While he was asleep at the switch, at least, it was people in MMS (Mineral Management Services), part of the Interior Dept., who actually granted them. He has responded to criticism by (predictably) firing some of those people. It is hard to know how it happened, but the buck stops with him, so let's agree that he's responsible, and maybe culpable. Obviously, he's good at bureaucratic politics. We (I am American) deserve better.
21:02 June 15, 2010 by wxman
This guy sounds like an indecisive light-weight. Therefore, the meeting should go well.
00:36 June 16, 2010 by Rebel
Svanberg would be well advised to read Robert Hare's book, "Without Conscience" or Paul Babiak/Robert Hare's "Snakes in Suits" so he can be prepared to stroke Obama's ego and maybe gain some points. He should not meet with Obama without some background on Obama's psychology.

http://www.hare.org/
09:08 June 16, 2010 by rufus.t.firefly
@Rebel

You don't think they are both being well prepared with all available information/intelligence?

What is your interest in protecting this Svanberg character, or BP, anyway?
13:19 June 16, 2010 by cogito
@Rufus

Yes, in a meaningless symbolic gesture, they gave some little flunky the sack. Obama's secretary sec'y of interior gets to keep his job.

Incompetent or corrupt leadership routinely pass the buck to someone lower on the food chain

But as they used to say in the old Soviet Union, a fish rots from the head down.
17:56 June 16, 2010 by Rebel
Rufus, no real interest aside from pointing out that if the oil guy is meeting with Obama he should at least know the basic facts about how to deal with a psychopath.
17:57 June 17, 2010 by Vanity_of_the_Bonfires
Svanberg is out of his element. Pres. Obama put him through a good ol' Chicago shakedown.
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