Industry Comment: VGA’s recent actions raise concerns about its parent company's commitment here
In a few years from now, current Volvo Group Australia (VGA) chief Martin Merrick will be gone, no doubt replaced by yet another corporate climber from Volvo’s executive stocks.
Like Martin Merrick and his very many predecessors, the newcomer – whoever he or she may be – will arrive with their pre-ordained agenda and their own methods for achieving Volvo Group’s goals in our part of the world.
Then, after another four or five years or thereabouts, they too will be shipped to another corporate assignment reflecting the success or otherwise of their Antipodean adventure, and once more leaving in their often swirling wash the local managers, staff and dealers charged with loyally and daily maintaining VGA’s interests and customer connections.
Some of Volvo’s imported leaders have been memorable. Some not. It’s almost certain, however, that Martin Merrick will indeed be remembered.
For starters, he is not Scandinavian. He is a Scot and true to history’s definition of a shrewd and frugal people, he appears to have a profound proclivity for engaging in his nationality’s nuance for cutting costs. Maybe that’s why he got the job.
In recent times, for instance, Merrick has overseen the removal of many VGA employees including some long-serving and extremely devoted people. Just how many remains unknown. There has been no official comment or statement but from quiet enquiries, around 150 people no longer call Volvo (or Mack or UD) ‘home’.
True, COVID-19 has had a dramatic impact on truck manufacturers and suppliers around the globe, forcing many brands to cut costs and people. In this, VGA certainly isn’t alone.
However, a phone call to Martin Merrick’s office to ask, among other things, about the job cuts revealed he had perhaps taken a leaf out of ScoMo’s book and gone on holiday while the heat was on, so to speak.
Yet the loss of some of these highly experienced and formerly devoted VGA staff has already been met with glee by a few competitors who have been quick to grab the experience and contacts of several VGA castaways.
Not so gleeful though are the VGA customers and dealers who in many cases have lost a trusted contact for their dealings with the group. Meanwhile, inside the group, far fewer people are now expected to deliver the same standards of service and support. A tall order, perhaps!
The big news right now, however, is Volvo Group Australia’s (VGA) decision to retreat from plans to exhibit at the Brisbane Truck Show in late May next year, blaming the uncertainty of COVID-19 restrictions.
As VGA states in a stark and nameless statement, ‘The current climate of uncertainty regarding travelling across state borders and the possible rapid implementation of social restrictions has created a challenging environment.
‘As a result Volvo Group Australia has reluctantly made the decision not to take part in the 2021 Brisbane Truck Show.’
HVIA says it has already filled Volvo’s floor slot at BTS
It’s intriguing that VGA should mention ‘uncertainty regarding travelling across state borders’. The company is based in Brisbane, so there are no borders to cross and besides, between 60 and 70 per cent of all visitors to the Brisbane show are Queenslanders.
Most intriguing of all, however, is that within hours of Volvo’s truck show decision becoming public, the Queensland government announced that Brisbane’s ‘Gabba’ stadium will host the AFL grand final on October 24 this year in front of a crowd of at least 30,000 people.
It appears it was also only a matter of hours that other major exhibitors, keen to expand their show footprint and clearly judging it’s way too early to make such a decisive call, were competing for at least part of VGA’s usual show space.
The Brisbane Truck Show is almost nine months away, so what’s Volvo’s haste in retreating so early?
Well, as COVID-19 picked up pace earlier this year, several economic pundits predicted the pandemic could easily become a convenient excuse for various actions by some companies which, in less stressful times, might think twice about taking difficult courses of action.
Consequently, this latest step by VGA could be easily construed as another cynical excuse to cut costs and shore up the Swedish giant’s corporate coffers as European markets nosedive before, during and possibly after COVID-19. Indeed, was it the prospect of a healthier bank balance that drove Volvo Group’s decision to do a deal with Isuzu and in the process sell UD?
Moreover, it is widely asserted that over the past year and more, VGA has been engaged in an aggressive drive to sell trucks at highly competitive prices and as one insider put it, “Get the money in the bank quick as you can.”
At a rough estimate, VGA will save between one and two million dollars by not attending the Brisbane Truck Show. A fair amount, for sure, and combined with the cost savings of substantial job cuts and boned budgets, it certainly shows that VGA is doing its bit for Gothenburg’s bank balance.
Nonetheless, VGA’s recent actions raise considerable concerns about Volvo Group’s commitment to Australia. VGA, of course, says it “… is totally committed to supporting the Australian economy and the road transport industry.”
Really? Surely it’s reasonable to suggest that the best support for the Australian economy as it withdraws from the pandemic mire and equally, support the industry which VGA takes its living from, would be to maintain employment and continue commitment to an event which emboldens confidence in the future.
Midst the gloom though, it is perhaps worth remembering that long after executive imports take their cash and kids back to their corporate castles, the Brisbane Truck Show will still be here showcasing the hardware and the innovation that makes Australian road transport unique and efficient in a harsh and challenging world.