UPDATED -- The Volvo Group is reorganizing based on truck brand, a move the Sweden-based global truck and engine maker says “offers clearer commercial accountability” for the group’s various truck brands.
Four separate units will be created, effective March 1: Volvo Trucks, UD Trucks, Renault Trucks and Mack Trucks, each with profit and loss responsibility for their respective business.
In a press statement, President and CEO Martin Lundstedt said he is creating a mandate for the Group's sales organizations to control and develop their business area with an explicit responsibility for their own profitability and organic growth. This means a stronger responsibility for each brand to stand on its own legs with respect to profitability both in the short and long term.
After several years of growth through acquisitions, followed by major restructuring programs and cost savings, Volvo says it is entering a new phase “with more intense customer focus and focus on organic growth and improved profitability.”
The 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.
Lundstedt will remain president and CEO. Claes Nilsson will head up Volvo Trucks and Dennis Slagle Mack Trucks.
When asked how this move would affect Volvo and Mack operations in North America, company spokesman John Mies said in the short term, this won’t be experienced by customers as a major change here in North America.
Organizationally, it means that Dennis Slagle, as global president of Mack Trucks, will expand his Mack responsibilities beyond North America, and sit on the newly constituted Volvo Group Executive Board.
Until now, Slagle has been in charge of both Volvo and Mack Trucks in North America. Mack President Stephen Roy and Volvo President Göran Nyberg have been reporting to Slagle. Roy will remain at Mack. Nyberg will stay in the United States reporting to Claes Nilsson, who is the new global chief of Volvo Trucks and based in Gothenburg, Sweden.
"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 said.
Volvo Group's two other major truck brands are UD Trucks, formerly Nissan Diesel, which no longer sells new vehicles in North America, and European manufacturer Renault Trucks.
The company also includes three common truck group segments: technology, purchasing and operations. These will provide services for the all four big brands. The Group also produces buses/coaches and marine/industrial engines as well as construction equipment.
Update adds more details about North American organizational changes.