Volvo ousts CEO and turns to rival Scania for replacement
By Niklas Pollard and Johannes Hellstrom
STOCKHOLM (Reuters) - Swedish truckmaker Volvo (VOLVb.ST: Quote) named Martin Lundstedt, the head of rival Volkswagen-owned (VOWG_p.DE: Quote) Scania as its chief executive on Wednesday, replacing embattled Olof Persson who has led a sweeping efficiency drive.
Volvo, vying for dominance of the truck market with Germany's Daimler (DAIGn.DE: Quote) and VW, also released better than expected quarterly earnings two days ahead of schedule and said it would seek an external partner for parts of its IT business.
While Persson's nearly four-year restructuring program has contributed to some of the strongest earnings of his tenure, Lundstedt is considered one of the most respected executives in the trucking industry and shareholders hope he will improve the company's global position.
Shares in Volvo, which have underperformed competitors' during what Sweden's shareholders association has called "four lost years" under Persson, shot up 12.4 percent to 113.7 crowns by 0847 GMT, higher than any time during his helm.
"The action program that Persson initiated seems to be biting and he should get credibility for that," Christer Gardell, managing partner at Cevian, Volvo's second-biggest owner by votes, told Reuters.
"But at the same time we support the board's decision to appoint Martin Lundstedt, who is widely recognized as one of the best leaders in the trucking world. Now he has the assignment to make Volvo the world's best trucks company."
Persson's plan aimed to cut 10 billion Swedish crowns ($1.2 billion) in costs and boost profitability to the level of more nimble rivals such as Scania, a task it has yet to achieve and so pressure from shareholders has been building.
Chairman Carl-Henric Svanberg, who as recently as April 1 had said he was confident in the work Persson was doing amid reports he would get the axe, told a news conference Lundstedt was being brought in to lead a new chapter for Volvo. Continued...