The Weil-Connected Reformer

At first glance, a review of Pehr Gyllenhammar's meteoric career suggests that he rose to the top because he has the right relatives. In 1969, at the age of 34, the trim, handsome lawyer replaced his father as head of Skandia, Sweden's largest insurance company. Two years later he succeeded his father-in-law as managing director of Volvo, the country's biggest industrial concern. Nepotism or not, the selection has certainly paid off. Under Gyllenhammar's leadership, Volvo has not only increased its sales by 70% (to more than $2 billion in 1973), but has also made some far-reaching labor-relations reforms.

Gyllenhammar has skippered Volvo with the same assurance with which he pilots his 31-ft. sloop Amanda III. Almost immediately after taking over, he replaced a centralized management structure with four semiautonomous divisions, each of which is responsible for its own profits. He also expanded production of trucks, marine and industrial engines and other products to a point where they account for 43% of Volvo's sales. Pretax profits reached $90 million during the first half of this year, despite a 19% decline in U.S. sales of Volvo cars.

In 1971 Gyllenhammar appointed two union men as voting members of Volvo's board, a customary practice in some European nations but at that time still rare in Sweden. He also made changes at Volvo's big assembly plant near Goeteborg, automating the heaviest jobs and establishing an internal placement agency to help people find more satisfying assignments. American workers will soon get a firsthand look at Gyllenhammar's style. Volvo has broken ground for a new assembly plant in Chesapeake, Va., the first automobile factory established in the U.S. by a foreign company since World War II. It is expected to begin production in late 1976.

For all the changes he has made, Gyllenhammar is no advocate of the kind of "industrial democracy" that would give workers an equal voice with management in corporate decision making. "I believe in giving workers some say in the way their job is carried out," he says, "but how can they have influence in such important executive decisions as where to put a new plant?" Although such views irritate militant Swedish unionists, Gyllenhammar's easy informality (he addresses workers with the familiar du, and they do likewise) and unpretentious style are the earmarks of a natural politician. Some Swedish pols have touted him as a potential leader of the liberal Folkpartiet.

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