Volvo CEO says engine merger with Geely saves jobs, costs

Volvo’s rapid shift toward electrification put thousands of employees working on the automaker’s current range of internal combustion engines and hybrid powertrains at risk. To preserve those jobs while still charging at full speed toward a battery-propelled future, Volvo plans to merge its powertrain operations with those of parent Zhejiang Geely Holding Group. CEO Hakan Samuelsson explained the benefits of the move in an interview with Automotive News Europe Managing Editor Douglas A. Bolduc.

What message do you want the news of this planned merger to convey?
That Volvo has taken another decisive step toward electrification by adjusting its business structure accordingly. Secondly, because half of our cars will be hybrids we are securing the necessary resources to further develop gasoline engines to make them excellent hybrids. We are also securing this supply at a better cost because we are combining the volumes of Volvo and Geely. We already have a combined 2 million car sales today and that will continue to grow rapidly in the future.

How much will this move save Volvo?
We haven't quantified it [the saving] but it will be huge. We are at least doubling the Volvo volume and that alone results in a significant cost savings. What might be even more important is that we are safeguarding our development resources.

How so?
Our development engineers would have been at risk of having their budgets squeezed if we were to do this alone. We would need to prioritize electrification, which means it’s likely they would not have gotten the resources they need to maintain their high level of competency. With this change we avoid this. We will continue to have very exciting r&d jobs for our team.