The 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.