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Reorganization at Volvo

Reorganization at Volvo
Is Mack’s parent company ready to stand on its own wheels? You may be thinking maybe not, but Volvo believes so.When the news about Volvo’s reorganization hit the media, many wondered what this reorganization truly meant. The company soon explained what this reorganization meant for the business in a press release. Volvo is all set to reorganize their truck business by breaking the heavy-duty business into four separate units: UD Trucks, Mack Trucks, Renault Trucks and Volvo Trucks. The Sweden-based company believes it is time to have their own share of profit and loss separately.

This new change will be effective form March 1, 2016, said the spokesperson on Wednesday.
But customers and investors must not take this reorganization as a major change. The only difference will be of the reporting relationships. Once the company is divided into four different domains run by different executives, the long chain of ‘who to report whom’ will break and become more efficient.

“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,” were his exact words.
“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,” Lundstedt said.

During a news release, President and CEO of Volvo, Martin Lundstedt said that the changes are for a better cause which will help them organize their processes better. He believed that decisions will be made quicker, keeping in mind the demands of our customers. He told the press that it was a new phase the company was entering and which focuses more on customers than solely on profitability and growth.

Lundstedt further added that this new goal is a step towards growth and better profits. The reorganization of the trucking business will allow them to be more efficient in less time.
“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.

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,” John Mies, the Vice President for Volvo Group North America communications noted. – See more at:

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