Volvo could oust CEO as time runs down on profit push-report
STOCKHOLM (Reuters) - After almost four years at the helm of truck maker Volvo (VOLVb.ST: Quote) and with time running out on showing the boon from cost cuts, chief executive Olof Persson may soon be heading for the exit, Swedish business daily Dagens Industri reported.
Volvo has been locked in battle with Daimler (DAIGn.DE: Quote) and Volkswagen's (VOWG_p.DE: Quote) truck brands for market leadership and has, over the past year, suffered a deep downturn for its construction gear in a plunging Chinese market.
Dagens Industri, quoting unnamed sources, reported that an announcement about the CEO's departure could come within one or two weeks, and that one likely successor could be Martin Lundstedt, head of Volkswagen's truck-making unit Scania.
Spokesmen for Volvo and its board chairman, Carl-Henric Svanberg, declined to comment on the report.
Volvo, Sweden's biggest company by sales and top private sector employer, has been on an efficiency drive aimed at boosting its profit margin by 3 percentage points by the end of 2015. The truck maker posted an operating margin of 8.7 percent in the final year before the efficiency scheme was launched. Its margin in 2014 ended at 2.1 percent.
Activist fund Cevian, the second biggest owner of the firm by votes, had called for it to end 2014 with a double digit margin.
Persson, who headed Volvo's former Aero and construction gear arms before becoming CEO, said in February the efficiency drive aimed at saving 10 billion crowns ($1.15 billion) was going "according to plan".
Handelsbanken Capital Markets analyst Hampus Engellau said the market had expected a gradual improvement of results, something which still seemed out of sight. But he added Persson still had some time before the deadline.
"Although it could be that they have come to the point of realising this is not going to work," Engellau said. Continued...