Automotive News - October 20, 2008 - (Page 22) 22 • OCTOBER 20, 2008 TA L K F R O M T H E T O P Odell: I can help Volvo tap more potential S tephen Odell has been one of Ford Motor Co.’s global troubleshooters for more than a decade. The 53-yearold Englishman has spent time as a top executive at Jaguar, Mazda and Ford of Europe. On Oct. 1, he was appointed CEO of Volvo Car Corp. — the first Ford executive to run the Swedish company, as well as the first non-Swede. Just 48 hours into his new job, Odell spoke with Staff Reporter Mark Rechtin at the Paris auto show. Odell arrives at a difficult time for Volvo, which has seen its global retail sales through September drop 13.5 percent to 295,634. Six days after the interview, he decided to lay off 3,100 managers, production workers and consultants. Fredrik Arp, your predecessor as CEO, wasn’t from Volvo, but is Swedish. Before that, all Volvo bosses were from inside the company. You’re a Ford man. Does your promotion signify anything about Volvo’s future? I don’t think so. Being a Fordie and being a Brit, you can ask what does that mean. I can’t change my nationality, but in the end it doesn’t get in the way too much. I have lived in a number of locations, including Japan. My perception is to be culturally accepting and to have the ability to integrate, not to be an inhibitor. I have been asking the Swedish government folks whether me being a Brit would get in the way of open dialogue between them and Volvo. They say not at all. Plus, there will be highlevel Swedes to keep us on the path. Half of my career has been with brands other than Ford. (So I know how to) deal with Ford in a constructive fashion; when to ask for help, and when to ask for help to be turned off. As former COO of Ford of Europe, I am pretty familiar with the product engineering and manufacturing arena, so I have a good porthole to look through on Volvo’s behalf. Has Volvo’s mission changed as a result of your promotion? I will make decisions in Volvo’s best interest. I chose to come here, I wanted to come here. I think I could add value and help the Volvo team realize a bit more of their potential. What are your main priorities? We have to make sure we have a sustainable cost base in the near- to medium-term. And also we are making sure we’ve got the right product mix. It has to be a Volvo product. Otherwise, we have no reason to be. Have you been put in charge of prepping Volvo for sale? Volvo is an important part of Ford. Volvo can go places Ford can’t in terms of (being) a European premium brand. It does add a big benefit to the portfolio. Everyone is asking me this question, though. I tell them that I’m prepping Volvo to get us to a sustainable profit. Right now, there are no good choices. I’m not going to let the ownership issue get in the way of the job I need to do. My conversation with Ford was about sustainable profit. There is no such thing as assurance, so I’m going to plan my busi- Stephen Odell How much time have you been given to turn things around? My goal is to return Volvo to a sustainable profit. When? At what volume? We’ll figure that out. You may ask what (sales) unit level Ford wants. I’m a sales guy, so I would say lots of them. But we have to operate on a cost base that makes sense. ness around those objectives. No one has given me an absolute deadline. Given the state of the U.S. economy — and that Volvo’s September sales were off 50 percent — are you looking at cutting U.S. allocations next year? I don’t know where the industry is going to be. I have heard it will be 13 million to 15 million in North America, with similar numbers for Europe. But we shouldn’t base our business on a retreating volume in North America. There’s dealer viability at stake if your volume goes down too low. As the economy recovers, you have to be in a position to be strong enough to be part of the recovery. Will Volvo stop selling small cars in the United States? You can see it either as an issue or an opportunity. Small vehicles get us back to the front of the environmental business. The psyche of Sweden is environmentalism. But in looking at the dollar to (Swedish krona) translation, we have to revisit the cost base. Volvo’s goal has been to sell 600,000 units globally by 2010. Has that been revised? I think we have manned capacity of about 500,000. That’s not the magic number; 600,000 was probably a pretty good projection back then. We have to have the right cost and revenue base. Selling lots more unprofitable vehicles is not a good answer. But people don’t switch brands for the amount of money in an incentive. Someone doesn’t buy MercedesBenz over BMW because of a $500 price difference. How goes the program to persuade some U.S. dealers to give up their franchise to improve profitability for the overall U.S. network? Can you estimate how many dealers are going to walk away? I met with the U.S. dealer advisory board when I was in the U.S. (recently). I met with a dozen dealers who are pro-Volvo, so that skewed my view. But no one is saying, “Come buy my franchise.” People are saying, “It’s hurting, but let’s make it viable.” Are there some dealers considering whether they want to — or can — stay in? Of course. But there is no reason to speed up the process that exists. Given the troubled state of Ford Credit, and the state of the capital markets in general, should Volvo dealers look elsewhere for retail financing? People are finding it more difficult to get lease applications approved. Dealers are finding it harder to get floor-stocking plans approved. Partially, it’s about confidence, but banks still have a ton of money. Leasing for Volvo is on a much bigger scale in the U.S. than in other markets. I’m not expert in it. A lot of dealers have their banking tied up through other businesses. Some are looking for alternate sources of retail paper, but there has been no mass migration away from the credit company. They are just doing what they need to do. How is Volvo doing in other markets? Can any of them pick up the slack? Four or five months ago, I would have said eastern Europe, Russia and China. The Russian car industry has since flattened out and probably doesn’t afford a huge growth opportunity. But Russia is like China a few years ago, when it shot up, went flat, shot up, went flat, shot up. They have some short-term recalibration. There are still 14 million people who still want to buy cars in North America and Europe. When you are little Volvo, there’s a big opportunity there. With so many other automakers promoting safety, is Volvo’s lock on that image in danger? Volvo still is considered the safety leader. It rings true with consumers, dealers and Volvo employees. It is vital that Volvo not walk away from that as a core element of who they are. It is sometimes difficult to communicate safety in a way that’s not boring. I would jump off a cliff with a big Volvo parachute if it would make safety seem less boring. Does the collapse of the large SUV market mean Volvo is reconsidering whether it should keep the XC90 in its lineup? My private view is that Americans like real estate in their product. If you can crack the nut with real estate and fuel economy, you have the answer. Has the product plan changed this year because of fuel prices? We are always looking at the cycle plan. What we thought about fuel economy and CO2 needs to change. There is an escalation within Volvo to move faster in environmental products. We will come to market pretty quickly. Does that mean the DRIVe hybrids shown here at the Paris show will come to America and not just be for Europe? We can’t just have the DRIVe brand for Europe because it’s a global brand. I don’t know if DRIVe is ready for America, but I would like to look at it. c
Table of Contents Feed for the Digital Edition of Automotive News - October 20, 2008 Automotive News - October 20, 2008 Amazingly, vehicle inventories are low An upside of the big slide: Raw material prices dip â for now With GMAC out, banks trickle in Get your daily Automotive News - in video form, starting Nov. 3 Honda's Fukui favors fed loans, confirms V-8 To move the metal, Mike Kahn moves the store Hyundai airbag flaw tied to drink spills Texas promo: Buy a GM vehicle, get GM stock Chrysler's uphill road in China GM/Chrysler? Anything's possible GM/Chrysler deal? Companies' pension plans may need cash Acura dealers: A V-8 engine is on the way Buyers pursue former Heard stores Honda: We're still lending Gilles, Ligocki will speak at congress Fed list promotes high-mileage cars Party time: Saturn turns to grass-roots marketing Online inventory service aims to cut dealer costs Document fees must not become a dirty little secret Just put up a 'For Sale' sign Cash for clunkers? Scrap the idea Arbitration can work for everyone It's time we control our own destiny GM missed boat on Cheyenne, Volt Sept. truck sales fall 7.4% Microheat seeks Chapter 11 At Bosch, r&d spending remains strong GM's new diesel opens up, loses weight Urea must flow or new diesels won't go Hankook plans to bring fuel-saving tire to North America Odell: I can help Volvo tap more potential So far, BMW cruises above the credit crisis Jatco builds China plant to meet expanding CVT demand 10 appointed at American Axle Personnel Milestones Obituaries Supplier Personnel Biking buddies Ford targets fleets with parental control key European sales fall; VW group bucks the trend 11 innovators win honorable mention 25 finalists selected for 2009 PACE awards Suppliers to the 2009 BMW X6 GMAC's loan cutbacks cost GM thousands of auto sales Credit tops agenda for NADA chief 'Flash' draws modest cash at theaters Booth's new berth sparks CEO speculation at Ford Economy's skid sends ritzy toys to eBay Report: Mazda scraps plan for U.S. plant GM's quandary: Finding loans for the imperfect Taylor to Hummer - and then ... ? Tough times at Tesla Automotive News - October 20, 2008 Automotive News - October 20, 2008 - (Page Intro) Automotive News - October 20, 2008 - With GMAC out, banks trickle in (Page 1) Automotive News - October 20, 2008 - With GMAC out, banks trickle in (Page 2) Automotive News - October 20, 2008 - Texas promo: Buy a GM vehicle, get GM stock (Page 3) Automotive News - October 20, 2008 - Companies' pension plans may need cash (Page 4) Automotive News - October 20, 2008 - Companies' pension plans may need cash (Page 5) Automotive News - October 20, 2008 - Gilles, Ligocki will speak at congress (Page 6) Automotive News - October 20, 2008 - Gilles, Ligocki will speak at congress (Page 7) Automotive News - October 20, 2008 - Online inventory service aims to cut dealer costs (Page 8) Automotive News - October 20, 2008 - Online inventory service aims to cut dealer costs (Page 9) Automotive News - October 20, 2008 - Online inventory service aims to cut dealer costs (Page 10) Automotive News - October 20, 2008 - Online inventory service aims to cut dealer costs (Page 11) Automotive News - October 20, 2008 - Arbitration can work for everyone (Page 12) Automotive News - October 20, 2008 - Arbitration can work for everyone (Page 13) Automotive News - October 20, 2008 - GM missed boat on Cheyenne, Volt (Page 14) Automotive News - October 20, 2008 - GM missed boat on Cheyenne, Volt (Page 15) Automotive News - October 20, 2008 - Microheat seeks Chapter 11 (Page 16) Automotive News - October 20, 2008 - Microheat seeks Chapter 11 (Page 16A) Automotive News - October 20, 2008 - Microheat seeks Chapter 11 (Page 16B) Automotive News - October 20, 2008 - Microheat seeks Chapter 11 (Page 16C) Automotive News - October 20, 2008 - Microheat seeks Chapter 11 (Page 16D) Automotive News - October 20, 2008 - Microheat seeks Chapter 11 (Page 17) Automotive News - October 20, 2008 - Hankook plans to bring fuel-saving tire to North America (Page 18) Automotive News - October 20, 2008 - Hankook plans to bring fuel-saving tire to North America (Page 19) Automotive News - October 20, 2008 - Hankook plans to bring fuel-saving tire to North America (Page 20) Automotive News - October 20, 2008 - Hankook plans to bring fuel-saving tire to North America (Page 21) Automotive News - October 20, 2008 - Odell: I can help Volvo tap more potential (Page 22) Automotive News - October 20, 2008 - Odell: I can help Volvo tap more potential (Page 23) Automotive News - October 20, 2008 - So far, BMW cruises above the credit crisis (Page 24) Automotive News - October 20, 2008 - So far, BMW cruises above the credit crisis (Page 24A) Automotive News - October 20, 2008 - So far, BMW cruises above the credit crisis (Page 24B) Automotive News - October 20, 2008 - So far, BMW cruises above the credit crisis (Page 24C) Automotive News - October 20, 2008 - So far, BMW cruises above the credit crisis (Page 24D) Automotive News - October 20, 2008 - So far, BMW cruises above the credit crisis (Page 25) Automotive News - October 20, 2008 - Obituaries (Page 26) Automotive News - October 20, 2008 - Biking buddies (Page 27) Automotive News - October 20, 2008 - Biking buddies (Page 28) Automotive News - October 20, 2008 - Biking buddies (Page 29) Automotive News - October 20, 2008 - Biking buddies (Page 30) Automotive News - October 20, 2008 - Biking buddies (Page 31) Automotive News - October 20, 2008 - European sales fall; VW group bucks the trend (Page 32) Automotive News - October 20, 2008 - European sales fall; VW group bucks the trend (Page 33) Automotive News - October 20, 2008 - Suppliers to the 2009 BMW X6 (Page 34) Automotive News - October 20, 2008 - GMAC's loan cutbacks cost GM thousands of auto sales (Page 35) Automotive News - October 20, 2008 - Credit tops agenda for NADA chief (Page 36) Automotive News - October 20, 2008 - Credit tops agenda for NADA chief (Page 37) Automotive News - October 20, 2008 - Tough times at Tesla (Page 38) Automotive News - October 20, 2008 - Tough times at Tesla (Page 39) Automotive News - October 20, 2008 - Tough times at Tesla (Page 40)
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