[piano intro] - Hello, I'm Nido Qubein.

Welcome to "Side by Side."

My guest today can help us understand how one company adapted to the pandemic and the era of constant change.

He knows about the importance of being nimble and resilient, a lesson we all need to master.

Today we'll talk about cars and technology and the future of the auto industry with the head of Volvo Americas, Anders Gustafsson.

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Ashley HomeStore, this is home.

- [Announcer] For over 60 years, the everyday leaders at the Budd Group have been committed to providing smart, customized facility solutions to our clients and caring for the communities we serve.

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[upbeat music] [upbeat music] ♪ - Anders welcome to "Side by Side."

I have been very interested in the transformation, evolution growth of the automotive industry, how it affects us here in The United States.

And you have had a remarkable career with Volvo and beyond.

You have done business in something like 94 countries.

You were born in Sweden yourself.

Now you live in New York and you are the president CEO of Volvo Americas.

And so I wanna talk to you about the electrification of cars.

I wanna talk to you about the future of the automotive industry, how you have taken certain parts of America in South Carolina, and hopefully sometime in North Carolina, where you've brought your business, where you've looked for workforce and you've built significant manufacturing facilities.

Let's first begin with you.

You were born in Sweden.

- Correct.

Lovely country.

- It is a democratic country?

- It is.

- With a King and a Prime Minister?

- [Anders] Yeah.

- Tell us something about Sweden.

What's the population?

What is unique about Sweden and Swedes.

- Small country, 10 million.

I would say it's a safe country, if I use that word.

We love nature.

Everything is open for everyone to visit; lakes, forest and so on, and so on.

The most famous companies, of course, Volvo Cars and Volvo Trucks.

And then we are well known for Spotify, Ericson, Ikea, Abba.

Then of course, if you're into sports, I need 30 extra minutes to tell about all the sports.

- Is soccer the most, what you call the football?

- Ah ah, ice hockey.

- [Nido] Ice hockey.

- But soccer too.

- Yes.

So you just mentioned Volvo and Volvo Trucks.

These are two separate companies that came from the same place.

- Yeah, born together, developed by two or three engineers.

And then 20 years ago, the company decided to spit up the operation and Ford bought the car business.

- Ford Motor Company.

- [Anders] Yes.

- Bought the truck business?

- The car business.

- Yes.

- Yeah.

- I see.

- And then they sold operation 10 years ago.

- And now both companies did an IPO, They're both public companies.

- Yes.

- Listed on New York Stock Exchange.

- Stockholm for Volvo Cars.

- I see.

- And different for Volvo Trucks.

- I see.

How can a small country like Sweden with 10 million people give birth to such international companies?

- First of all, it's very dark in Sweden.

It's cold.

We normally say it's warm inside and dark outside.

- [Nido] Yeah.

- We work hard, extremely hard.

- It's a culture.

It's in the DNA.

- Yeah, it is.

And also we have a consensus way of running things.

We are quite slow in the beginning to find the consensus of what we're supposed to execute and then we are extremely fast.

- Yeah.

How does that work?

When you say consensus, you mean there is no hierarchy of management.

- I would say we have some kind, we have hierarchy, but Swedes are normally very humble and hierarchy, ah, it's not so important for us.

The most important thing is that our colleagues do understand what they're supposed to achieve.

They need to believe.

And it's a very purpose-driven leadership style.

- So take me into a boardroom or take me into a colleague team meeting.

And you as the top hand show wanna get something done, what do you do?

Do you present an idea?

Do you talk about a cause?

Do you define a problem?

And then what do you do with the team consensus-wise to arrive at the proper avenue of action?

- First of all, we have something called Fika in Sweden.

And Fika is the same as you drink coffee and you eat something.

And the Fika session is a big part of the culture where we communicate with each other, high and low between everyone.

We just meet and we talk.

- Sort of a social.

- [Anders] Yeah.

- Well, that's how the Middle East works.

You've worked in the Middle East.

You take 30 minutes to an hour to just get to know each other.

- Yeah.

And that's really where you have the freedom to lobby and just talk overall.

Then the meeting structures, of course, we always have too many meetings.

I think this is same in every company, but we have a pre-read culture that you need to go through the material before the meeting.

You need to understand what we're supposed to achieve.

- So you've sent everybody in advance something.

- [Anders] Yeah.

- Material, PowerPoint, something that says, this is why we're meeting and this is what.

- It's really our wordings.

You know, we are not so much into PowerPoint.

- Yes.

- We like that people should understand the reason why we have this conversation.

- [Nido] Yes.

- The opportunities around it.

And then based on the culture that the leadership is very, very flat, everyone can speak up.

I wouldn't say, as a leader, you need to show the way, but people should speak up a little bit.

- [Nido] Yes.

- And I think that's probably one of the reasons why we are so fast.

- When you say fast, you mean you streamline ideas, you are productive, you are efficient.

Is that what you mean by fast?

- Yeah, I would say we prioritize.

It's extremely, it's so many things that you need to do in a company, but everything cannot be important.

You need to box it into priorities.

And I would say that's probably one of our strengths.

- You speak a lot about authentic leadership.

- [Anders] Yeah.

- What does that mean to you?

- Honesty, and honesty is the same as you shouldn't always bring the positive things on the table.

You need to give and take and people should feel safe.

Because if they feel safe, they will share when we don't have agreement.

- [Nido] Yes.

- We don't kind of have the same vision.

And it should be addressed early in the process.

Not that you take a decision and then you have three, four separate meetings, and then after six weeks, they come and present the facts that this was not a good idea.

That's really what I mean that we are fast.

- I see, I see.

And when you hire people, when you attract them into your inner circle team, leadership team, what do you look for?

- I would say, now I recruit the management team and of course I'm involved in some extraordinary and we need to find a spearheaded talent in a specific area.

But I would say I use my heart a lot.

I have long conversations, very value-based discussions.

And then after a couple of years, you know, you see it, and then of course you click and that's about life.

- Yeah, you sort of develop that sixth sense of identifying the good part.

I look for intelligence, character, energy.

Because absent that I'm not too sure you can move forward in a meaningful way and in a productive way.

So you grew up in Sweden, you told us about some of the Swedish nuances, if you will, about culture and approaches.

You've lived in The United States five or six years.

- [Anders] Five years.

- What has been sort of the dramatic difference that you sense between living in Sweden and living in The United States?

- First of all, I love this country and I have three kids and they will never, never move back.

And that's a sad story from one point of view.

But I would say, I love that you love the country.

I would say Swedes loves the country too, but not in the same way.

- When you say love the country, you mean patriots, patriotism?

- Yeah, and respectful.

- Yes.

- And also you give more than, I would say the Swedish culture.

- In a philanthropy kind of way.

- Yeah.

But also give from yourself.

You are willing to help.

- [Nido] Yes.

- And just to look at how you interact with the kids in school and so on compared to Swedish culture where the school system is totally different.

- How is it different?

- If I compare, just take my personal view is that, here is quite demanding to be a parent.

You need to be involved.

And the teachers, they really love their work.

I don't criticize Swedes, but I would say the level of respect that we show to teachers is on a lower level in Sweden compared to US.

- Very interesting!

Well, let's talk about the automotive industry for just a moment.

There's so much to talk about electrification of cars and then this autonomous driving.

You know, driving a car, a truck without a human being.

- [Anders] Yeah.

- Computer-driven, if you will.

Tell me your views about electrification.

Is that really coming?

When do you think it'll come?

What are the challenges for it to get there fast, to use your word?

And then we'll talk about autonomous cars.

- I think we'll just start electrification because that's really our priority.

2025, 50% of our production is going to be full electric.

- [Nido] Really?

- 2030.

- Is the country ready for that?

- Yeah, and there we come to the question mark of leadership and transformation and what we see.

And I would like to say, first of all, five years ago, or seven years ago, or 10 years ago, when we talk about Uber, you know, Uber was, we told our kids you should absolutely not go and surf or be on the worldwide web and talk to people that you don't know.

You should absolutely not jump into a car where you don't know the driver, and today everyone is doing it.

So it goes fast.

Consumers change their mind, and I think this transformation will go by far faster than we could ever imagine.

- But is the structure ready for it?

In other words, one of the questions about electrification is the distance one can drive a car with the energy still within its means.

Is The United States amply able to provide structure to support electrification of automobiles?

- First of all, US is not a country, it's a continent.

- [Nido] Yes.

- And of course you have differences all over US, but I can say that normally when we have this conversation, if you are negative or nonbeliever electrification, I sometimes ask colleagues to, can you please show me your phone?

And then they take their phone, and then I say, "could you take a look at how much of the memory capacity that you use?"

And normally people don't have a clue and they don't use maximum of the capabilities of the phone.

- There's so much more potential.

- Yeah.

So it's a kind of, you see what you believe or you believe what you see, this is going to happen.

- [Nido] Yes.

- And the reason why.

- But it is happening.

I mean, to some extent it is happening.

- And it's happening faster than.

If we had this interview three years ago, I will probably use different words around it.

The pandemic have learned and pushed us into a direction.

So I think if you talk about semiconductors and the problems of semiconductors in our industry and other industries is really forcing us to go for local production.

And that's really what The US government is trying to do, that you cannot lean on production somewhere else.

We need to keep this country running.

- Supply chain, et cetera.

- Yeah.

And based on that, I think everyone understands that if other countries are faster and stronger around developing electrification and electric cars, then we're going to put this country in the same situation as we did with the semiconductors, and that cannot happen.

- You know, Anders, you're speaking about something very, very important.

I live in a part of North Carolina that lost 90,000 jobs in a matter of short period of time when NAFTA came along and all the rest I serve on boards of companies that occasionally will outsource services to India, Mexico, et cetera, both manufacturing and actual services.

Automotive industry in America lost a very significant part of its manufacturing to the world, right?

Outside continental USA.

It costs jobs.

I'm intrigued about what you just said that semiconductors of course are made in China and other places, all these chips that we depend on.

Right now, so much of what we're suffering through is we can't get a chip to put in something to finish up the product.

- So true.

- Tell me more about where you see us going.

Is The United States capable of standing tall, stepping out and stepping up to meet that demand?

Or are we gonna see ourselves again in outsourcing galore?

I mean, automotive industry now assembles in The States a lot, but manufactures lots of places around the world.

- [Anders] Yeah.

- And I'd be intrigued to know how Volvo does it in The US in your view about the future of outsourcing versus manufacture in The USA.

- First of all, competition is good.

We are getting better.

- [Nido] It's good for the customer.

- Yeah.

Everyone is getting better.

You need to have, you know, the freedom of trade is extremely important for every company because you need to get better and you need to work with your cost structure.

What we are talking about is really that you need to have the competence and the capabilities to do it.

- [Nido] I see.

- And I think that's [indistinct] - You need workforce.

- [Anders] You need workforce, - [Nido] Yes.

- engineering, scale.

And I would say all of those things you have in this country.

- Who in the world is the best at that?

- It's Taiwan right now.

That stands for majority of the semiconductor if we talk about that.

Electrification is in an early stage, and I would say US with Tesla as a front runner, extremely advanced and fast.

And we are probably the second one that is so dedicated to electrification.

So transformation is that you need to make up your mind.

You need to believe in the technology, in the future.

The facts are there.

The world is getting tougher and tougher.

Sustainability is getting more and more important for all of us.

Therefore, electrification is a part of that solution even if it's going to take many, many years.

- When a company like Volvo Americas or Volvo Worldwide dedicates significant resources, both on the human side and on the fiscal side, how do you allocate such resources that you know that you're not gonna get return on investment in the near future, and yet you're a public company and you want your market cap, your EPS, your earnings per share, your price of shares, your institutional investors are all watching the performance and betting on the come.

But what I'm intrigued is, as the head guy, how do you sell that?

And how do you monitor that?

And how do you satisfy your investors?

- First of all, you need to stop doing some things to be fast into transformation.

You cannot do exactly what you did before and you just add on and add on and add on because then the R and D cost will be sky high.

- Yes, research and development goes out of control.

- And I would say, the investors, I wouldn't say that they're smarter than we are.

Absolutely not.

But I would say if we don't invest in the future, the return will not come.

- [Nido] Yes.

- You know, we cannot stand still.

That's the worst thing you can do.

- Yes.

But it's proportionate.

- It is.

You know, speed can never compensate wrong direction.

But I would say, based on the facts that if you just enjoy your electric car for one day, you will not turn back.

Then you have question marks around where you can charge it, the infrastructure of charging.

But based on the decision from this beautiful country, you need to have charging capabilities.

Because if you don't have charging capabilities, you will not be able to push manufacturers to develop electric cars.

And if you don't produce electric cars, the battery development will not be executed in US, and then they will do it somewhere else, and then we are behind again.

- [Nido] I see.

- So that's the kind of a.

- Yeah, so feeding and evolving the electrification of cars is not just a nice thing for comfort and consumer demand.

- No.

- It has amplificated reasons that can impact the economy itself, for example.

- Yeah.

And I would say, based on my answer, this is a continent.

You know, all software engineers, or a majority of the software engineers, five years ago, they were located on the West Coast.

And we know, the cost is two, three times higher, loyalty is two years, seven months.

They work for themself, not for the company.

It's a different market.

And now in the pandemic, we have decided based on that, we need to be fast, that we can scale it and move the competence all over this beautiful country.

And that will help to grow this country in a faster way.

- Yeah, enhance and increase GDP, which is what we need at all times.

- [Anders] Yes.

- We talked about briefly the autonomous driving.

Is that the right term for it?

- Yeah.

- Do you see, talk about electrification, where does autonomous driving comes in?

When might we see it?

What are the things that are keeping it from moving fast?

I've seen a lot of programs on autonomous truck driving where the computer does it all.

Maybe there's somebody else in the cabin, just as a second set of eyes.

Sounds scary to me, I have to tell you.

So tell me, give me your point of view.

- First of all, Volvo cars, everything is about safety.

You know, we invented a safety belt and we gave it for free, the technology.

- So Volvo invented the, - [Anders] Safety belt.

- the safety belt.

- [Anders] Yeah.

- I didn't know that.

- And then we didn't sign a patent on it.

So it's free for everyone to use.

- Was that on purpose you didn't do a patent?

- No, it's the culture.

- Or someone just forgot what to do?

- No, no, absolutely.

Not really.

Three years ago, we did the same with all our safety development and all the knowledge we have around safety related to women and pregnant women.

It's free for all manufacturers to take a copy.

- Tell me why you do that.

- Because life is important.

If you have something that can save lives, why?

Share it.

Doesn't matter.

You know, if other cars are getting safer, that's good for all of us.

And of course it builds our brand.

But in the beginning it was just share it.

Now, I think that's the great with the culture we have in the company.

- So what is keeping us from having autonomous Cars?

- First of all, we will never launch that if we don't know it's 100% safe.

- [Nido] Yes.

- And it takes time to develop.

And we take the customer in steps.

Now we have, you know, pilot assist where you can, the car will help you and guide you.

- Yes.

Like parking the car, et cetera.

- Yes.

And that's kind of a first step.

- [Nido] Yes.

- And that's the same with electrification, that you normally start with a hybrid, and then you learn to charge, use that maybe 15% of the time and so on and so on.

So your view on how you can use the technology is getting easier for you to understand.

- So it's all dependent on technology, right?

It's a computer-based programming.

- [Anders] Sensors.

- But what happens with the structure itself?

I mean, the car is one thing, but I would think that the way the roads are done, the way the stop signs are made, the way the mapping of the country is done, all of these must be in sync.

Where are we in that process as a continent, to use your word?

Are we at the 20 percentile, 30 percentile?

Where are we?

- You know, we have a lot of great companies in US that is extremely good at this, from a camera, sensor point of view.

And then we have, of course, Volvo's competence as a base.

We work with the company called Luminar and they are helping us with developing the sensors that we need.

The computers that you you need is also a US-based company because the computers needs to be faster and faster, and of course, they need to share the information that the car will pick up based on the sensors.

It's the reason why this will take some time, because exactly what you said, the maps, street, everything change.

So more cars on the roads with the technology will make it faster and faster and faster.

- So this is really a, it has to have public private partnerships, right?

- [Anders] Yeah.

- Government regulations, manufacture, design, manufacturing, et cetera.

Well, Anders, you're a fascinating guy.

You certainly know what you're talking about, you're in a very competitive industry.

You're in an industry that demands constant and consistent growth and knowledge and engineering competence.

What's in your future?

What is it you hope to do the rest of your life?

- First of all, I love Volvo cars and that's really where I'm going to stay if I do a good job.

- [Nido] Yes.

- I sit in a few boards that gives me inspiration and then I can inspire and I can lead through my board structure.

I really, really like that.

But now in front of us, we are going to execute this electrification strategy.

- You're serious about it.

- Yeah, yeah.

It's the kind of a, that's 95% of my time.

- Yeah.

95%?

- [Anders] Yeah.

- So this is a top priority for Volvo.

- [Anders] Yes.

- Are you equal to others in the competitive sphere or are you ahead of them?

- I would say everyone talks about it.

- [Nido] Yes.

- Everyone invests in it.

But I would say on top of that, we are very dedicated to do it.

That's my answer.

- You mean business?

- Business-wise, but R and D, you know, investment competence, how we structure the company to prepare for this.

It's not just to tell R and D to develop the technology.

We need to have the sales model in place, we need to have infrastructure of maintenance, parts, battery suppliers.

This is a marathon, it's not a sprint.

- Yes, of course.

How many employees altogether Volvo Americas?

- We are around 50, 45, 50,000 globally, - [Nido] Globally, okay.

- in the company.

I have my headquarter in Mahwah New Jersey.

- [Nido] Yes.

- We have our manufacturing facility in Charleston, - [Nido] South Carolina.

- And then we have our R and D and software development in California.

- California.

So altogether.

- Together with our dealers, we have 15,000 in US.

Headquarter is around 2000 with Charleston.

- Well, it's fascinating talking to you about the present and the future, the Swedish culture, and way of doing business.

And we're delighted to have you here, and I'm delighted that you're with me "Side By Side" and I wish you the very best always.

Thank you - Thanks so much.

Thank you.

[upbeat music] ♪ - Funding for "Side By Side" with Nido Qubein is made possible by; - [Announcer] Here's to those that rise and shine to friendly faces doing more than their part, and to those who still enjoy the little things, you make it feel like home.

Ashley HomeStore, this is home.

- [Announcer] For over 60 years, the everyday leaders at the Budd Group have been committed to providing smart, customized facility solutions to our clients and caring for the communities we serve.

[soft music] - [Announcer] Coca-Cola Consolidated is honored to make and serve 300 brands and flavors locally.

Thanks to our teammates.

[upbeat music] We are Coca-Cola Consolidated, your local bottler.

[upbeat music]