Volvo CEO Stefan Jacoby Speaks for First Time, Worries Us

Aug 19, 2010 - 9:12:07 AM

Stefan Jacoby, Volvo’s new CEO swiped from Volkswagen of America, made his press conference debut in Sweden yesterday to introduce himself and make his intentions known. We were impressed — he didn’t slip up and say VW instead of Volvo a single time.

Jacoby’s talk started with the typical and expected executive speech about how excited he is to be part of the company, how his new role as CEO is “a pleasure and an honor.” Yeah yeah, that’s right off the first page of a speechwriter’s handbook.

He continued on to boast about the new “first-class, hand-selected board” that will help him make his decisions going forward, saying that with new investors Volvo has “significant plans” going forward. He went on to reaffirm what others within the company have already said about Volvo staying put in Gothenburg. “What’s important here in Gothenburg is that Gothenburg is the head of Volvo and will remain the head of Volvo.”

As far as his direction for the company, Jacoby describes himself as a car guy and says that the “main focus over the next few years will be product, product, product,” a great change following the era of “Please Volvo, develop more components for Ford’s vehicles while yours grow old and stale.” He says product development will be “quicker and more direct” and that he recognizes the disadvantages of being a smaller company but also the advantages, that “we have to look at smart, intelligent solutions to overcome the obvious disadvantages of not having the scale. There are opportunities to cooperate with suppliers and maybe other manufacturers.” He continues on in a way that makes us worry just a bit: “There may be opportunities with our sister company, Geely, as well.”

Yes, he’s already talking about co-developing products with the Chinese parent company with the questionable quality and build. “Our Chinese investment,” Jacoby says, “offers opportunities to source out of the Chinese market as well, which would put us on a better cost basis.” That’s what worries us. Since Jacoby arrived at his previous post running Volkswagen of America, he’s set goals for huge growth that we’ve never really thought VW needed in this market. He aimed for Toyota, not simply being the best-selling German brand in America. As a result, from all reports the new 2011 Volkswagen Jetta is a big step back in material quality and uses old technology like rear drum brakes and a torsion-beam rear suspension. Now that he’s talking about sourcing more from China, we really have to worry that Jacoby intends to make some sacrifices in his big product push, when in reality Volvo needs to step it up to remain competitive with other premium European brands.

We’re not going to claim that Stefan Jacoby isn’t an intelligent businessman. But after his early comments and his most recent moves at VW, we do have to worry just a bit about Volvo’s history of quality carrying on into the future. We just hope we’re wrong.