At the helm: Exclusive interview with Volvo CE’s new CEO Melker Jernberg

Melker Jernberg discusses the global and Middle East markets and how the equipment giant i=s navigate the times ahead

For a man who took charge of Volvo Construction Equipment around six months ago, Melker Jernberg can be expected to be a big-picture man. When asked to sum up his feelings so far, the affable Swede says: “fantastic”.

“It’s easy to say that because it’s a good business environment and we are doing good as a company at the moment. But we are in a cyclical business, so there will be sunny days and there will be rainy days,” he adds, tempering his feelings.

“Volvo CE as a company is fantastic to come to. There’s are a lot of dedicated and professional people. I’ve spent my time travelling extensively because it’s a big company and there are a lot of sites, which are important to me to get to know when it comes to both operation and production, as well as R&D.

“Our sales organisation and distribution network are equally important. We have 212 dealers and 200 partner companies, and they are extremely important for us as they are the interface with the customers. On a normal day it’s our dealers who are facing the customers. So I’ve met quite a few of them; actually 108 out of the 212 so far. It’s been quite an intense and enjoyable process getting to know the company.”

Jernberg has been in the industrial sector all his life. He has been connected with heavy vehicles and the automotive world in various ways in three different companies of global renown before he joined Volvo. “I’ve spent more than 20 years at Scania, the Swedish truck and bus maker, where I was heading the bus division in the last four years. We had a lot of bus business in the Middle East, so I do have first-hand knowledge of the region.

“After that I was heading the EMEA business for SSAB, which is the biggest Swedish steel producer. And then for the last few years before joining Volvo I was the CEO of a Swedish company dealing with metal powder, a niche in the steel industry. But its powder that you use in making parts for most automotive sectors as well as for applications such as surface coating, and a lot of applications that even Volvo CE does, too. So I’ve been close to Vovlo CE in many ways,” he explains.

Managing different mindsets

Elaborating on what he brings to Volvo CE, joining which he feels is a homecoming of sorts, Jernberg says: “From an organisational perspective, it is how you, together with your colleagues, run a company where you can have different mindsets. Already in my first six months or so, I’ve had good discussions with my colleagues about how we would like to run this company in the coming 10 years and even in the next 100.”

That Jernberg is enjoying his work in a very infectiously Swedish and Volvo-ish way is amply evident in the fact that he took a hands-on approach to participating in this year’s Volvo Days, Volvo CE’s famous customer outreach event. In the process, Jernberg became probably the first company president in living memory to actually take part in the product demonstrations.

“It was fun to drive a Volvo machine in the Volvo Days customer demonstration, and while I love to drive the excellent machines that Volvo makes, the underlying message in this act is that we are an organisation that is committed to being close to our customers, partners and stakeholders at every level,” he explains about driving in Volvo’s new R100E flagship rigid hauler into the demo arena.

Speaking about the various industry sectors Volvo is involved in, he says: “Our home turf is the heavy equipment, where we are strong globally, not just in the EMEA region. But the compacts busines is growing in many different places and is an important part of the business, and my view is that we are steadily gaining market share all over the globe.

“But we also know that we have a lot of very strong competitors and that’s good because it drives innovation in the sector which benefits the end-users. But what we have learnt, and are trying to address, is that it’s not the same business logic for everything. It’s very different to sell our huge haulers like the A60 or R100 compared with selling to and serving customers for a 1.8t compact excavator. So, we are also trying to differentiate how we work for customers and dealers in various segments.”

Passionate about Active Care 

An important recent development at Volvo under Jernberg’s watch is the development of Volvo Active Care, which is something the new president is very passionate about.

“Active Care is the use of telematics and data for preventive or pre-emptive maintenance. We are testing Active Care in the US at present, with the final aim being to roll it out worldwide. The principle behind the solution is to monitor equipment data in real time and call the dealer when any kind of niggle or trouble is anticipated that could potentially affect uptime. If the dealer doesn’t answer within a stipulated time frame, say around 60 minutes, we call the customer directly and tell him what the issue is and what needs to be done,” Jernberg explains.

“It’s a concept that will reduce downtime a lot. Also, we’re not pushing the customer to buy a spare part or service; it’s only about uptime. It’s about discovering what’s going to go wrong before it does, and addressing the problem before it arises and causes disruption. So, it’s being proactive and pre-emptive.”

Speaking about the importance of Active Care in a place such as the Middle East, he adds: “The Middle East has some of the most extreme conditions and remote work locations of any territory on the planet, and the machines are very maintenance intensive because the filters have to be replaced very often and the cooling systems are extra robust.”

But there are challenges in implementing Active Care too, especially the attitudes of people in various parts of the world towards sharing data, such as in the Middle East.

“It’s natural in many places that people may have reservations about sharing data, and the Middle East is no exception to this. The mindset here could give rise to a feeling that they are being pushed to do something that they are not sure they want to do. However, that is usually only the initial reaction and since we don’t have any hidden agenda, that will disappear quite quickly, because then they see that Volvo really means to help them. And when we demonstrate the system a few times, customers see the benefits in it for them,” Jernberg says.

“We invest in our network, we invest in service and parts capability within our business and then there is of course our product range. All our products are good, especially our tractor excavator, which is the best excavator you can buy. However, if you don’t have the parts and the service, it becomes a challenge. It all starts with the product, but whether you are operating in Abu Dhabi or Aberdeen, the big contractors have to have top service. And that depends on us – so that is the differentiator today,” signs off the new man at the helm.

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