One day after he joined the board of Volvo from Ford last October, Stephen Odell, president and chief executive of Volvo, sacked 25 percent of the workforce.
Everyone, even the unions, knew it was coming – and necessary – because demand for Volvos was on the floor, especially in the US where they usually sell best. The company’s costs were simply too high for survival.
Odell could have hidden behind his newness in the job, but he faced the cameras and gave it to them straight, the way he has always done in a varied career full of similarly tough calls. “The US market collapsed as I arrived,” he says. “I don’t think it was due to me. But it was still reassuring to get a call from Alan Mulally, my chief at Ford, reminding me that I wasn’t the problem, but part of the solution.”
Then came more sticky medicine, pay cuts for management as well as daily-paid, and Volvo posted a stonking $255 million first quarter loss – an amount, Odell archly points out, which is only one-seventh of Mercedes' reverse for the same period. Ten months in, Odell has come to be admired in Sweden for his straightforwardness, his simplification of the management structure, and his determination to conquer.