we are very concerned about the conditions for Ericsson’s continued development, the authors write. Photo: Magnus Hjalmarsson Neideman
A business without technologically advanced products at risk of exclusion.
It is good for Volvo, is good for Sweden. It is a legendary statement of 1968 by the Minister of Finance’s String. It was based on a simple insight that if the export-oriented technology companies are developing well, so it benefits the entire national economy.
Just eight years ago was calculated Volvo Cars. Production of cars was considered to belong to the antiquity of some political representatives. Among pundits in the financial world, Volvo was considered too small. Today, many people, not only Zlatan Ibrahimovic, who instead want to sing along to the chorus of praise. Volvo Cars is investing and exporting as never before.
Let us return to the conditions for their return. But first, something that right now contrasts with this success – Ericsson. There is not a day that we looked gloomy headlines about Ericsson in the media. CEO Hans Vestberg hung out for expensive air travel. Anticipated bribes from business in Asia is a regular feature. The accusations of inefficiency in spending on research and development another. And so the recurring layoffs that creates anxiety among employees. Now CEO Hans Vestberg left the company.
Ericsson is a technology giant , which managed to survive numerous changes in technology for more than 130 years. Still hailed the success of the past that put Ericsson on the map and delivered profitability. Let us just remind you of the telephone exchange AXE who became a formidable cash cow. It was not until “in order” by management but largely through a dedicated work “bit off” of the company’s engineers, known as Skunk Works. And so it has continued. Time after time, Ericsson has managed to get out of critical situations and re-take the lead in the telecom world.
We have a strong concern that these conditions are increasingly undermined. Short-term results and a management approach where engineers reduced to a homogeneous machine that goes to the parameter control on the hourly rate risk relegating Ericsson to the history books.
Innovation does not occur by constantly picking new working condition from a never-ending back smiled but by provide competent engineers freedom and responsibility in a supportive environment. We need a working environment where there is space and confidence to work with innovation and where good ideas can be tested and lead to innovative products. At the same time need the same engineering force used for the streamlining of innovation if it is to go to defend a Swedish business in the long run.
What happened at Volvo Cars? After a few troubled years after Volvo AB sold Cars to Ford as the company was bought up by the Chinese company Geely. Instead of unilateral transfer of technology, it has invested in long-term development of research, development and production. The staff has been mandated to work with the next generation vehicle and given a lot of freedom. It is not the quarter that matters but the profits have been reinvested. All development has been funded by the company become better. Volvo’s advertising “Made by people” is rooted in this. The technical solutions that were developed “alongside” today is such that praises the market. Who dared to ten years ago, believe that a four-cylinder diesel could qualify in a large SUV, which also has good environmental properties?
Now, when Volvo Cars greatly expands its business, it is an irony of fate that 1000 of the new development engineers move into Ericsson’s empty premises in Mölndal.
We are two representatives of the engineering profession in Sweden. We cooperate across many borders and work to the Swedish-based global industrial groups to have continued good development prospects, regardless of whether the devices ABB, Sandvik, AstraZeneca, Scania and Volvo and Ericsson. Therefore, we are very concerned about the conditions for Ericsson’s continued development. We know that Ericsson must continue its ongoing transformation. Services and service is an important part of the business. But a company without technologically advanced products at risk of becoming a company in the amount of long term risk of exclusion. Our hope is that the owners see this and put course from suffocating short-term to long-term development capacity.
Investor and Industrivärden has been and significant shareholder, with its large holdings in Ericsson (far more than 40 percent). They can show responsibility by straightening out all the doubts that exist today. They can influence the board to decide on a vigorous development agenda and can by these decisions to persuade other shareholders that Ericsson will be a company to be reckoned with. We assume that both Johan Forssell (Investor) and Helena Stjernholm (Industrivärden) wants to give a mandate to the next president. Such an agenda would generate strong internal development force. Good for Ericsson and good for Sweden.
Per Norlander
MSc, Chief union negotiator, Ericsson
Magnus Sundemo
MSc, Chairman academics Volvo Cars
Per Norlander and Magnus Sundemo Photo: Private
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editor: Carina Stensson, Deputy editor: Carl-Johan Bilkenroth, Email: debatt@svd.se, Tel: 08-135149, Twitter @SvDDebatt, Facebook: SvD Debate
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