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May 23, 2016 01:00 AM

Bo Andersson, out of the shadows

Jason Stein
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    AUTOMOTIVE NEWS ILLUSTRATION
    Bo Andersson: "I am extremely thankful I had the experience. Everything has its time."

    DETROIT -- In a tucked-away corner of an empty restaurant, the familiar face emerges from the shadows, slipping into the room like a character from a John le Carré Russian spy novel.  But it's not a spy, or a novel.

    It's Bo Andersson. Yes, that Bo Andersson. The Swede who came in from the cold.

    "It's very good to see you again," Andersson says, standing, smiling in a trim blue suit, white shirt and a pale blue tie dotted with tiny palm trees and pineapples.

    Jason Stein is publisher and editor of Automotive News

    He extends a militaristic handshake and speaks with an accent all-too-recognizable.  He's characteristically on time, but times have changed.

    It's an unseasonably cold Thursday in mid-May, and Andersson, the former General Motors purchasing boss and recently departed CEO of Russia's largest carmaker, AvtoVAZ, has come back to a place he once called home to talk about a place he just left.

    "It was a dramatic step going to Russia," says Andersson. "I am glad I took it. I learned a lot. But when you look at the number of players in the market, it's a very, very tough market. Russia is, for me, something I would still like to understand better."

    Over 120 minutes, the 60-year-old Andersson drinks five cups of Earl Grey tea; recounts the collapse of a once-booming Russian auto market; talks oil prices, sanctions and rubles. He stares you down with the same sort of determination that, critics say, was too radical for Russia's strange mix of a planned economy and free-market capitalism. 

    "There is a saying in Russia: Russian men have a problem to harness the horse, but harness it for him, and he will ride as long as you want," Andersson says. "Setting up in Russia is extremely difficult. But if you develop the process and establish what to do, they can work like no one else." 

    Few worked to make Russia run right like Bo. 

    But as he told us in 2015, his quest to stamp out corruption and undo uncompetitive state contracts ran into a wall of business practices as old as the Soviet factories he inherited. It was a world like no other -- from a war with suppliers and shady contracts to high-profile car launches with Vladimir Putin in Sochi. 

    "We got along well," Andersson says of Putin. "He understands that the automotive industry is very important to the country's success." 

    But on this day, he will not, and does not, talk about his former employer. 

    "I am extremely thankful I had the experience," Andersson says. "Everything has its time."

    Bo Andersson: "If you have clear ground rules and live within them, I don't see a problem. But there was business we did not take because we could not take it."

    'Most wanted man'

    Andersson spent seven years trying to understand Russia better -- ultimately returning Russian light-commercial vehicle GAZ Group to profitability, then accepting the position as CEO at AvtoVAZ, the first non-Russian to lead the company. He updated model lines; cut 20,000 jobs in a bloated work force; reversed absenteeism; renovated showers, cafeterias and toilets; increased market share from 15 to 20 percent; improved cash flow; and raised standards for supplied parts.

    Then he watched the economy collapse.

    Currency, oil, gas and foreign investment plunged in 2015.

    The market for passenger cars and light-commercial vehicles -- about the same as Germany's in 2012, with 3 million units -- dropped by half within three years.

    When it was time to cut more jobs, Russia's climate turned very cold for Andersson.

    Posters went up in AvtoVAZ factory elevators calling for his dismissal, says a person close to Andersson, who asked not to be identified. Protesters called for his head.

    By late 2015, amid the macroeconomic pressures and ever-tightening scrutiny, AvtoVAZ was bleeding cash, and Andersson was blamed for a $1 billion loss and a personnel policy deemed too tough.

    "He was the most wanted man in Russia," says the source.

    After 28 months at AvtoVAZ, he was out.

    Of Russian President Vladimir Putin, he says, "We got along well."

    "People in Russia loved the idea of not having corruption, but at the end of the day, not everyone is in agreement," the person says. "You are never one of them; you are an outsider." 

    Andersson says during his time in Russia -- and throughout his career -- he had "zero tolerance" for corruption. 

    Did he discover a lot of it in Russia? 

    "Yes," Andersson says. "If you have clear ground rules and live within them, I don't see a problem. But there was business we did not take because we could not take it." 

    The framework for an auto industry in Russia is well-planned and engineered, "but when you get into how things are executed, it is a very different story," he says. "Is it working? Yes and no." 

    The biggest challenge is for suppliers, he says. 

    "I understand how suppliers work and have seen many good ones. But you take a market [where] you have 24 plants and total production capacity of less than 1 million units, then I would say it is extremely difficult for a supplier to have scale and to be profitable." 

    So, for the first time since he worked at Saab in 1993, Andersson moved back to Sweden, heading to his summer house in Falkenberg, a town of 20,000. He planned to take three months off to "do nothing." But "after one week, I had cleaned my house and organized the silverware in the drawers, and I said, 'I don't think this is working,'" he says. 

    He started to work his Swedish contacts and reunite with military friends. Eventually, he reconnected with an old professor in the engineering and business schools at Linkoeping University. 

    This week, Andersson will start there teaching an MBA course in purchasing.

    Ex-AvtoVAZ CEO Bo Andersson was blamed for a $1 billion loss.

    Future is 'wide open'

    He will never forget the lessons of Russia. Or the stories.

    "One day, as CEO, I came to a plant where we produced military trucks, and a lady yelled at me and said, 'Why are you here?'

    "I said, 'I am here because we want to implement lean manufacturing at the plant.'

    "She said, 'You should not be here. You should go back to Moscow and make sure the contract is signed so that we have an order for military trucks, so our jobs are safe.'"

    Says Andersson: "That was extreme: a strong lady saying, 'You are our leader, and you are responsible for our well-being.' So I turned around and worked on the contract."

    On his own future, Andersson takes a final sip of tea and stares back at you with the old Bo glare: "The global auto industry is where I belong. I had a lot of good experience in North America. I worked in Europe. And I would be interested in Asia. I am wide open."

    With that, the Swede rises, shakes hands one final time and disappears into the shadows again -- for now.

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