Volvo chairman Johnsson resigns in unexpected move

 @ibtimes
on January 15 2010 10:32 AM

The chairman of Volvo , the world's second biggest truck maker, resigned on Friday in what analysts said was a surprising move just three months away from the firm's annual general meeting.

Finn Johnsson, who had chaired Volvo's board since 2004, cited increasingly comprehensive assignments as his reason for stepping down. He will be replaced by Louis Schweitzer, chairman of AstraZeneca , until the next AGM.

He has a wide range of missions and they have become more and more demanding, a spokesman for Volvo said.

The spokesman added that Johnsson was unavailable to comment himself on Friday because he was undergoing surgery.

Schweitzer, who takes over immediately from Johnsson, has been a member of Volvo's board since 2001 and was previously chief executive and chairman of Renault, which holds a 20 percent stake in the Swedish truck maker.

Analysts said that Johnsson, who has been heavily criticized for Volvo's poor management of the recent market downturn, may have been forced to surrender his chairmanship.

Shares in Volvo, which lost ground earlier this week on speculation of a share issue, were a shade lower on Friday at 65.05 Swedish crowns ($9.24) against a 0.4 percent fall in the wider Stockholm index <.OMXS30>.

I would interpret the market reaction as relief that there is a potential for a new board, Handelsbanken analyst Hampus Engellau said.

He (Johnsson) has been highly criticized by some of the main shareholders on the back of both paying out dividends, given the cost of capital this year, and also (not) taking blame for poor performance.

The heavy truck market was hard hit during the global recession and Volvo has lagged competitors such as Germany's Daimler as conditions have started to improve. In November, Volvo truck shipments fell 37 percent year-on-year.

Patrik Lindqvist, an analyst at HQ Bank in Stockholm, said Johnsson's resignation, three months before an AGM, was unlikely to have been voluntary.

That doesn't make sense, he said.

The appointment of Schweitzer is unlikely to be a sign that Renault wants to become more deeply involved in Volvo, he added.

For Renault it seems unlikely that they would want to increase their ownership in Volvo, Lindqvist said.

(Reporting by Nick Vinocur and Johannes Hellstrom)

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