Volvo gets new CEO amid rumors of sale and multi-million dollar losses

Ford has appointed a new CEO for its Volvo subsidiary amid rumors that the Swedish carmaker could be up for sale and reports that it lost more than $151 million in the first quarter of the year alone. Stephen Odell will replace Fredrik Arp as the carmaker’s president and CEO from October 1, and will report to Ford’s European boss Lewis Booth.

Odell’s previous post was Ford of Europe’s COO, and before that he held several senior level positions at Mazda and Jaguar. He first joined Ford in 1980 as a graduate trainee at one of its London offices.

"Stephen Odell brings to Volvo a wealth of experience of strong leadership in the automotive industry," said Ford CEO Alan Mulally. "Given his strong track record at Ford, Jaguar and Mazda, the time is now right for Stephen to take up this new challenge at Volvo. I believe that Stephen is the right person - together with Lewis Booth and the Volvo Cars Management Team - to take Volvo forward and to return the business to sustainable profitability."

Fredrik Arp has held the helm at Volvo for the past three years and during that time has implemented tough cost reduction policies and introduced a number of exciting models such as the C30 hatch and upcoming XC60 crossover (pictured). Despite his best efforts, Volvo posted a $151 million lost in the first quarter of the year and a $120 million loss in the second quarter. Second-quarter sales also fell to $4.3 billion from $4.4 billion during the same period in 2007.

Negative currency effects, mainly due to the weak U.S. dollar, and increasing raw material prices have deteriorated Volvo’s financial situation, and the outlook remains bleak. Odell now plans to continue the restructuring program started by Arp in order to prepare the company for a profit once the global economy picks up again.

"Volvo is one of the great iconic automotive brands," Odell said. "The very attributes that make Volvo distinctively Swedish – its heritage of safety, environmental concern and its Scandinavian design – appeal to customers around the globe. Our strategy is to enhance the premium nature of Volvo by further strengthening these attributes."

"We have a restructuring plan in place that will help to deliver a more competitive business and that enables Volvo to continue to build upon its core strengths. Volvo will adopt a more stand-alone approach within Ford, while still leveraging product development and purchasing synergies with other Ford operations," he explained.