Volvo Shares Soar on Debut at the Stock Market

Stock markets around the world were in a frenzy on Tuesday morning as Volvo shares surged on their debut at the stock market. The reason for this surge is that investors believe that the company has become more agile and competitive, and can now produce better cars than before. However, the biggest headache for the company is going to be its labour force.

Volvo workers say that they are worried about their future as a result of new investors coming into the company and demanding changes. The demand for an 8 hour workday has been met with resistance by Volvo management, who insist that this would affect productivity. There is also a demand for higher pay.

Volvo is in the middle of negotiating its annual labour agreement with employees, but both parties have miles to go before they can reach an agreement. Volvo management has said that it wants the company’s turnaround plan to work and that means that there are difficult times ahead for workers.

Working conditions at Volvo have been a hot topic after the recent suicides of five employees. The company was unable to explain what prompted these workers to commit suicide and it has sparked a lot of speculation. Employees have said that there’s a cloud over the company since then, and that many feel insecure about their future jobs.

A major conflict in labour negotiations is usually the question of salaries; when worker units demand higher pay, managements usually reject such claims citing the company’s financial position and their inability to afford such increases. But with Volvo management admitting that it wants each employee in Sweden to make a little more than 8 000 SEK every month, it is safe to say that we are heading towards a major conflict in labour negotiations.

In the beginning of the 2000s, Volvo workers in Gothenburg went on a five-month long strike and very nearly bankrupted the entire company. Fortunately for them, Ford bought Volvo soon afterwards and was able to save it from bankruptcy. The new investors in Volvo will want management to learn from history so that they don’t have to deal with unhappy workers.

In 2014, Volvo sold 534 000 cars, compared to 320 000 in 2013. As a result of this growth, the company reported a net income of over 4 billion SEK which is almost double its earnings from 2013. In January of 2015, Volvo sold more cars than ever before – 57 200 units, which is a growth of 8.7% compared to the same month in 2014.

The new investors are betting that Volvo can grow even more and become an even bigger player in the industry. With rapidly growing sales figures and large profits, it’s understandable that shareholders would want to see higher wages for its employees so they’ll feel appreciated and thus, more motivated to work harder.

Volvo has been owned by three different companies in the last 15 years and every time there has been a change in ownership, workers have protested against it. This kind of sentiment is especially strong among Gothenburg’s workers who feel that they’ve been royally shafted for many years now.

According to Volvo Cars CEO, Håkan Samuelsson, they want to grow quickly in order for the company to reach an operating margin of 8%. In order to accomplish this, they have set a target growth rate of 10% per year. Last year, they sold about 550 000 cars and if they want to reach their goal of 800 000 cars by 2020, they are going to have to sell about 100 000 more.

Currently, the company has an order backlog of 465 000 cars that are due for delivery within the next three years. This means that if they are able to sustain their current growth rate every year up until then, there could be a lot of work available for workers up until then.