Volvo: Mergers and Employee Relations

Our group had the opportunity to hear the Vice President of Human Resources speak about the impact of mergers on the culture of the company with Ford Motor Company (USA) and Geely Automobile Holdings Ltd (Chinese). With any merger, it can be hard to navigate the cultural differences in terms of communication and operations. Just think how hard it can be to merge teams within an organization, think about an entire organization! In 1999, Volvo Cars was sold to Ford Motor Company who was focused on creating a premier automotive group. Volvo and Ford had very different cultures and neither was accepted by the other. Volvo is very proud of doing things “The Volvo Way” which was in every aspect of business including the assembly line and employee relations. Volvo’s employees are deeply committed to the brand. In 2008, the economic crisis hit and Volvo had their worst year; layoffs were planned. In Sweden, the last person hired is the first person to go which created an issue because the most recently hired were those with the high competences (designers and the engineers) and needed to be retained in order to continue to propel Volvo forward. Volvo worked with the unions to create a deal in which they could retain these individuals. Volvo moved employees to Volvo AB (trucks) in an effort to retain jobs for those individuals who would have otherwise been laid off.

In 2010, Geely Automotive Holdings purchased Volvo Cars. Here again, Volvo had to find a way to navigate working with the cultural differences. There was speculation in the media and by employees that their jobs would be relocated to China, but Geely kept most if not all jobs in Sweden. Because the Chinese auto market is growing by 7%, Geely has added a production facility in China and thus created new jobs and opportunities. All Chinese employees are trained to meet the Volvo standards and work in the “Volvo Way”. More than 80 people are hired a week in China.

Volvo makes it a point to take care of their employees. They offer competitive compensation packages, room for career advancement, interesting positions and flexibility which is all part of the employee value proposition. Their employees are passionate about the cars and passionate about the company. Overall, Volvo is an amazing company and stays true to their values.