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Volvo buys Leyland

7th April 1988, Page 7
7th April 1988
Page 7
Page 7, 7th April 1988 — Volvo buys Leyland
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Which of the following most accurately describes the problem?

• Leyland Bus has been bought by Volvo Bus Corporation for a sum believed to be in excess of £20 million, less than 15 months after Leyland Bus went through a £4 million management buyout.

The takeover, which bolsters Volvo's controversial campaign to be regarded as a British manufacturer, has been led by Larserik Nilsson, the president of Volvo Bus in Sweden. He now becomes chairman of Leyland Bus, which retains its name.

According to Nilsson: "The complementary product ranges of Leyland and Volvo will enable us to strengthen our sales and manufacturing base within the European Common Market and throughout the world. The Leyland Bus manufacturing facilities at Workington and Farington will enable the newly-enlarged Volvo Bus Corporation to significantly increase its chassis production."

Volvo Bus says its Boras bus assembly plant in Sweden is currently operating at full capacity and is under pressure to produce more. "We are very short of engineering capacity," says Volvo. All right-hand-drive Volvo bus and coach chassis sold in the UK are built at the Boras plant, and the buy-out will now allow 1,000 B 10M chassis to be built at the Farington Leyland plant in 1990, says the company.

Volvo says that its new UK production base will help it develop a vehicle to meet European Commission approval in 1992. As a non-European Community country, Sweden would be excluded from some European Commission contracts.

Leyland Bus management will undergo changes following the buy out and JOrgen Barr of Volvo Trucks in Sweden will step in as temporary managing director. Former chairman and chief executive Ian McKinnon will step down, but will retain his seat on the board.

Finance systems director Eric Turner and manufacturing operations director George Newburn are to leave the company.

Volvo and Leyland plan to manufacture about 5,500 PSVs this year. Volvo employs 1,700 staff in its bus operations; Leyland Bus has 1,850 employees at both its manufacturing plants in the North West and its four service depots in the UK. They had been offered a shareownership participation scheme by McKinnon at the time of the management buyout in January 1987 — such a scheme now looks unlikely.

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