AB Volvo CEO to resign next summer

After almost 14 years as president and CEO of AB Volvo, Leif Johansson announced his intention on Wednesday to resign in conjunction with his 60th birthday next summer.

AB Volvo CEO to resign next summer

“My years at Volvo have been a fantastic period in my life and this is by no means a light-hearted decision, but at some point, it’s time to leave. The timing is good both with respect to my personal situation and with respect to the more stable situation for the company,” Johansson said in a statement.

In conjunction with his resignation, Johansson will also leave the board of AB Volvo.

“I made this announcement today because I wanted to give the Board ample time to arrange with an orderly replacement process,” he said.

Johansson’s decision to leave as CEO and President of Volvo is not based on a desire to move on to a CEO position in a different company.

“I have been CEO and president of public companies for 20 years now and have no intention to move on to a CEO position elsewhere, but I might consider new board assignments,” he said.

Johansson turns 60 in August 2011 and has served as president and CEO since 1997. He is currently the chairman of the European Round Table of Industrialists and sits on the boards of pharmaceutical firm Bristol-Myers Squibb and Swedish consumer goods and pulp and paper manufacturer SCA.

“Given the tremendous job Leif Johansson has done in transforming the Volvo Group into a truly global and leading player within the commercial vehicle industry, I would have liked to see him stay on his post for a little longer, but I obviously have to respect his decision,” said Chairman Louis Schweitzer.

AB Volvo manufactures commercial vehicles, including trucks, buses and construction equipment. It also supplies marine and industrial drive systems, aerospace components and financial services.

In 1999, Volvo sold its automotive division Volvo Cars to Ford Motor for $6.45 billion (44.61 billion kronor). The two companies shared the Volvo trademark on heavy vehicles and cars.

In 2008, Ford announced its intention to sell its interest in Volvo Cars, with the parent of Chinese auto manufacturer Geely Automobile scooping up the brand for $1.8 billion last year.

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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.