Case 04: Will Volvo’s perks give Ford sticker shock?
Ford Motor Company’s purchase of Volvo in 1999 is likely to change the life of Volvo employees.
And the employees aren’t too excited about giving up the status quo.
Volvo’s employees at the Company’s flagship plant in Gothenburg, Sweden, enjoy a wealth of
benefits. For instance, they get to use the company gym, Olympic size swimming pool,
badminton and tennis courts, and outdoor track and tanning beds. There is also a hot-water
pool, where workers go for physical therapy sessions after a hard day on the assembly line. This
is all mad available to employees for $1.50 a day. Similar facilities exist at other Volvo plants. In
contrast, although employees at US Ford Plants usually have a free-of-charge fitness center, the
facilities are nothing like the health club at Volvo.
Volvo employees are worried. Will they lose their health club? Will Ford’s goal to turn Volvo into
a “Volume car” change the way they work? That could mean a three-shift, round-the-clock
production schedule, just like in the US. Volvo employees currently work only two shifts. Will
Volvo employees’ job security be threatened? Will the quality of their work life change? Fortyyear-old Jari Saarelainen, a Volvo night-shift worker is concerned. He now works less than 30
hours a week but gets paid as if he worked 40 hours on the day shift. The shorter hours allow
him to spend lots of time wife his wife and 4 children. “it’s a human way to work” he says.
Saarelainen knows he has it good but argues that his undemanding workload helps the company
because productivity and moral are higher than they would be under a more conventional
employer. “we hope that Ford can grasp that this system is better for the company and the
workers” he says.
What is Ford’s position? The company’s CEO only says, “I respect the Swedish heritage.” But he
adds, “nothing is safe in this world; there are no guarantees.”
What do you think Ford should do to satisfy Volvo’s employees.