200,000 Volvo HandsThe hands of man are his first and most importanttool. When "Jacob", the first Volvo, was made, itwas hand-built. Skilful woodworkers shaved thewheel spokes for this, the very first of many greatcars. Although machines have now taken over theheavy and boring jobs in the motor industry, Volvoproducts are still craftsman built since only profes-sional ability and skill can give the particular quali-ty and long service life for which Volvo productsare justly famous. The machines are used to simpli-fy the work involved.

The job done by the individual Volvo employeeis the basis on which Volvo's production program-me stands firm.

Volvo employees, whether they be in the GroupExecutive, within Purchasing or Sales, Marketing or

Economy, Finance or Research and Development,Service or Parts, Workshops or Proving Ground -all take part in the creation of a Volvo.

About four thousand million people populatethe earth. Approximately two thirds live in whatwe call the developing countries where the businessand economic life and the transport apparatus arejust evolving.

Common to both the established industrialcountries and the developing countries is the needof transportation. Transportation is needed tofreight material to and from the factories, to carryfoodstuffs to the consumers, to carry people toand from their places of work and their leisure acti-vities.

The need of transportation is worldwide. The

tools of transport, whether they move by road,rail, air or sea, provide the communications with-out which no individual person could live and with-out which no community could be established ormaintained. Volvo is a company which has its maininterests in transportation. This makes Volvo anintegral part of our present day community. TheVolvo product programme encompasses a wealth oftransport products with a scope which permitstheir participation in many phases of the develop-ment of society.

The society we live in is also dependent on theindividual. It consists of individuals, functionsthrough them and must be adapted to them.

We need to feel happy, to believe that we aredoing something worthwhile in our work, to expe-rience satisfaction. We need to work in an environ-ment which is as humane as possible, which pro-vides us with the best conditions for our work -both physically and psychologically.

There are no patented solutions. Each and every

place of work has its own unique problems, everyproduct demands its answers. The organisation ofthe work and the technological solutions used mustbe adapted to the conditions prevailing in eachspecific place of work.

The Volvo Group is continually at work tocreate a good and fully acceptable work environ-ment, to adapt machines to the people who are tooperate them, to organise the work so that theindividual in the workshop or the office has thepossibility of having a say and an influence on hisor her own work situation. The developments ofwork environment and technology within Volvo gohand in hand to create good working conditions,efficient, profitable production and productswhich serve our society.

Volvo believes that man and efficiency can becombined!

Carefully considered solutions, favourable work-ing conditions and approximately 200,000 Volvohands do the job!

Products for our society

Ever since Volvo's rather inconspicuous birth in1 926 with a starting capital of 200,000 SwedishKronor and its first products - the "Jacob" carand the first truck a year later - the fundamentalprinciples of the Company's product developmenthave been safety and quality.

Our products must be to the gain and pleasureof the individual and must never be to the detri-ment of our environment. Volvo quality impliesthat we are prepared to accept the responsibilityfor our products.

The demands Volvo makes on its sub-contractorsare tough. The quality control procedures applyingto all materials used in the Volvo production pro-gramme are very exacting and cover all stages ofmanufacture; from the sub-contractors' own inspec-tions based on Volvo specifications, to receptioncontrol at Volvo and then the many further stagesof inspection throughout production.

To this can be added the intensive research and

development in matters concerning safety, exhaustemissions, noise abatement and traffic environ-ment. This work is carried out by the developmentfacilities of the Volvo Group which include im-posing laboratories at the Volvo Car Division head-quarters in Gothenburg where approximately1,000 technicians and researchers are busily atwork in this special technical centre.

It was here, for example, that Volvo developed aseries of experimental cars - VESC (Volvo Experi-mental Safety Car) - and much of the experiencegained in this work is now put to use in theproducts of the Company. The Volvo cars of todaycan be truly said to be "production safety vehic-les" - PSV, and include engineering features ofboth injury avoiding and accident avoiding nature.

Volvo today is a company with a very broadproduct programme. The car programme consistsof the 240 and 260 Series, cars of a classic designwhere the accent has been more on the develop-

ment of function and safety, rather than onfashion and styling trends.

Volvo Car BV now gives the Group small cartechnology and the Volvo 66 and Volvo 343 with aunique automatic transmission which considerablysimplifies driving and provides a continually variab-le ratio to suit any traffic situation.

The Volvo truck programme, from 6 to 60 tongross vehicle weight, covers most types of transport-ation. Volvo's main endeavour in this field ofoperations is to build commercial vehicles whichfulfil the customers' requirements with regard todesign and equipment.

The truck driver spends his working day in thecab. Therefore, Volvo has paid considerable atten-tion to creating a functional and safe workingplace, and a truck with built-in safety, not only forthe driver but also for other road users.

Trucks which are built to be efficient in long-distance operation are too big and noisy for urbanareas. Volvo has developed city tractor units whichare powered by diesel engines, specially adaptedfor operation in sensitive environments - no sootyexhaust gases, very little exhaust smell and, moreimportant, the toxic contents of the exhaust gasesare considerably below the most stringent legisla-tive requirements in force today. The noise level is

also considerably below all general and local re-quirements and the ancillaries of these vehicles areall designed for quiet operation.

The Volvo Bus Division specialises in the analysisof route networks, traffic control, communications,fare systems, etc., to arrange the most efficientutilisation of existing road networks. This to offerthe customer the opportunity of investing in sen-sible, well-tried and tested projects instead of tech-nical fantasies which imply radical changes to ourexisting environment.

Volvo has crash investigation teams for cars,trucks and buses. These teams work in close co-operation with the police and emergency servicesunits to investigate the scenes and if possible thecauses of accidents in which Volvo vehicles are in-volved. In this way, valuable information is gather-ed which can be used in the continuing work ofmaking Volvo products yet safer.

One of the "heavies" of the Group is Volvo BM- one of Europe's leading manufacturers of earth-moving, agricultural and forestry machines. Abouthalf of the production of the Company is sold onexport markets.

Volvo Flygmotor builds jet engines for theViggen fighter aircraft. This company is also ex-panding vigorously on the civilian side of the busi-ness, particularly in hydraulic pumps and motors.

Volvo Penta industrial and marine enginespower everything from pleasure boats to fishingfleets, generate electric power, are the heart ofmany an artificial irrigation project and also powervarious types of contracting equipment.

An addition to the programme is a range of out-boards which make Volvo Penta the biggest manu-facturer of this type of engine in Europe. The pro-gramme now includes ten different models withpower outputs ranging from about 3 hp to 70 hp.

Through its subsidiaries, Volvo also manufactu-res and markets leisure products for both winterand summer use.This very comprehensive program-me includes equipment for skiing, ice-hockey, sail-ing and camping.

The Volvo Group also has considerable experien-ce in industrial working environment and the appli-cation of modern technologies. Volvo Engineeringis a unit established within the Group and is respon-sible for marketing this know-how and can offer itscustomers the construction of complete industrial

facilites and related projects.Volvo's products are an integrated part of our

modern society and in their various ways contribu-te to the communications which are so necessaryto the development of our world- people-moving, both private and public- goods transportation- earthmoving and contracting machines for the

building of housing and industries- fishing and shipping- agriculture- forestry- industrial know-how

Techniques for qualityThe technological efficiency necessary to createproducts of first class quality and a good workingenvironment are two of the cornerstones on whichVolvo's development of its facilities in Sweden andabroad are based.

The requirements Volvo makes on its subcon-tractors are very demanding. Right from the verystart, they are obliged to take into considerationVolvo's very specific requirements. Volvo's guidingprinciple is: machines adapted to people - notpeople to machines.

The equipment for Volvo facilities is carefullydesigned in consideration to noise levels, the risk ofinjury, the purification of possible wastes and allaspects of human engineering.

Volvo also creates new technologies to ensurethe quality of the product and also the well-beingand satisfaction of the individual. Examples of thisinclude the final assembly plant at Kalmar, theengine plant at Skövde and the new Volvo BM faci-lities at Hällby on the outskirts of Eskilstuna. Eachone of these facilities represents a stage in the evo-lution of new working methods, new productiontechnology and new factory layouts.

Entirely new concepts are applied in these facili-ties. The production methods and transport techni-ques for material flow are revolutionary. TheKalmar and Skövde factories have self-propelledcarriers which transport the chassis and enginesfrom station to station throughout assembly. At

environment for peoplethe Hällby factory, a new type of hover carrier isused which takes the hard work out of movingheavy goods.

The prosperity of our society has never been ashigh nor its level of education better - two factorswhich mean that the demands we make on ourworking environment are also farreaching.

Job environment requirements and functionalrequirements go hand in hand from the very startof the planning work for new buildings and improve-ments.

Work environment, however, is not only amatter of the floors, walls and roof of a building orthe colour schemes, ventilation, spaciousness orequipment. Work environment is also very muchdependent on the people working together, thepeople who make up the close-knit environment inwhich they work.

We also have a need to feel we belong to an auth-entic team, to be able to communicate freely andto receive appreciation for the work we do. Anemployee must also be able to influence his or herown working situation and feel a sense of purposeand satisfaction.

Job participation being able to have a say in theworking organisation - requires a sense of responsi-bility. At Volvo, "power sharing" and responsi-bility have been delegated to all levels, and workarrangements such as job rotation, job expansionand job enrichment are commonplace.

Job rotation means that the employees in onesection of production can change jobs with eachother once a day or possibly more often. In thisway, every employee can develop multi-skills with-in his or her section. The physical and psychologi-cal conditions are improved.

Job expansion means that the individual is in-volved more deeply in the work, the work cycle islengthened and monotony is lessened.

Job enrichment means that more responsibilityis given to the individual, responsibility for thingssuch as quality control, job planning, etc.

Illus. J. At the Kalmar Plant, assembly carriers incorporatinga tilting mechanism considerably simplify work on theunderbody of the car. The work stations are arranged alongthe outer walls of the buildings where there is plenty ofdaylight and good contact with the surrounding world.

Illus. 2. The petrol engine factory of the Skövde Plants is"different". Both the factory layout and the technologyused are characterised by new-thinking. Electrically power-ed assembly carriers simplify operations and are controlledby the assembly workers themselves.

Illus. 3. Cheerful colour schemes at the Umeå factory contri-bute to a bright and pleasant work environment. High tech-nical standards and consultation groups give the correctbackground for quality products.

The consultation and information activities with-in Volvo are well developed. Matters of commoninterest within the Group are handled by the Corp-orate Works Council. Every Volvo company alsohas its Works Council as well as a number of sub-committees and consultation groups. In additionto this, there is an extensive amount of consulta-tion between the employees and the companythrough project groups. The building of new facili-ties and any changes made to old plant are alwaysplanned in co-operation with the representatives ofthe employees.

Together, the employees and management workhand in hand to create an efficient productionmachine and a satisfactory working environment.

1

3

Financing forgrowth

From the very start, one of the fundamental prin-ciples of Volvo has been to create the resourcesnecessary for expansion within the Company.

A high level of liquidity is vital to any enterprise.Good liquidity brings independence, the ability toact independently and to invest for healthy growth.

The post-war period was the first in which Volvoinvested intensively, the growing demand for Volvoproducts necessitated increased resources.

It was during this period that the Company wasconsiderably restructured. The production appara-tus was expanded, as was the service network.

In 1958 the Company acquired a land area on theoutskirts of Gothenburg and it was here that theTorslanda Plant - Volvo's biggest assembly plantfor cars - was opened in 1964. In 1965, Volvo builtanother plant for the manufacture of interior fit-tings and trim.

During the 1960's, the Group invested more thanSkr. 1,400 million in facilities and machines includ-ing assembly plants for cars at Ghent and for trucksat Alsemberg in Belgium.

A Technical Centre was built for Skr. 220 million,and other examples of investments in the'70s in-clude the assembly plant at Kalmar, the engineplant at Skövde, the Hällered proving grounds, newfacilities for BM at Hällby and an assembly plantfor cars in the USA.

In Belgium, Volvo has built a large central ware-house and an assembly plant for light trucks.

This high rate of investment demands largefinancial resources. To meet these requirements,the Volvo Group has negotiated financing throughSwedish and foreign banks. Through support fromthe Volvo shareholders by subscribing new issues,through bond loans and through the introductionof Volvo shares on the stock exchanges in othercountries, the Group will continue its growth andincrease its sales.

In the toughening economic climate, the workof the financial and economy departments is extre-mely vital. They must keep a very watchful eye onthe fluctuations in the international rates of ex-change, the economic trends, the complexities ofworld events and also the corporate spending.

Inflation, new technology and expansion de-

mand investments, alter the rate of self generationof funds, increase borrowing and influence theratio between equity and outside capital.

However important the question of finance,Volvo's most important asset in the continuationof development is the professional skill of its em-ployees and the confidence its customers have inthe quality of the Volvo products.

Illus. 1: The establishment of Volvo plants in the rural areasof Sweden brings new jobs and attracts other industries.The Bengtsfors Plant produces the interior fittings forVolvo cars.

Illus. 2: Volvo BM's new facilities at Hällby on the outskirtsofEskilstuna feature "hovercraft" carriers which move ona cushion of air. This is typical of the investments made tolighten the work and improve the environment.

Illus. 3. The acquisition by Volvo of Ryds Industri AB addedadvanced small boat technology to the leisure productssector of the Group.

Illus. 4: The Volvo Torslanda Plant was one of Volvo's big-gest investments during the 1960 's. Improvements to theworking environment are being made continually.

Illus. S: Volvo's proving grounds at Hällered to the west o fGothenburg give the Group the facilities to test its productsunder real life conditions. This is the braking track and padwhere brakes and handling are tested.

Illus. 6: Volvo broadened its marine engine programmethrough the acquisition of an outboard production plant atUppsala.

2

3

4

6

A Swedish companywith international aims

Volvo is a Swedish company. Its headquarters androots are in Sweden. But Sweden and Scandinaviaare a limited domestic market. In this respect,Volvo is unique. Most automotive manufacturingcompanies have very large domestic markets.

The major part of Volvo's production is based inSweden, but the largest sales potential lies abroad.

This is why Volvo activities abroad are expand-ing but since the major components are still manu-factured in Sweden, Volvo is investing in and con-siderably strengthening its production apparatus inthe home country.

Volvo's relative smallness, seen from an interna-tional point of view, is an advantage in that it givesus considerable flexibility and the possibility ofgrowth on foreign markets.

Volvo's possibilities of expansion are very large.The four thousand million people on this earth areconcentrated to limited parts of its surface. Thisimplies enormous potential through the expansionof transport systems, road networks, housing andconstruction, forestry and agriculture, etc.

Volvo has wholly-owned or part-owned plants incountries including Belgium, the Netherlands,Canada, Peru, Iran, Malaysia, Thailand, Austria andAustralia.

The largest of the Volvo assembly companiesabroad include Volvo Europa, which is situatedwithin the EEC block and incorporates car and

The Far East is a growing market for Volvo cars.

truck assembly plants at Ghent and Alsemberg inBelgium; Volvo Car BV, with plants at Born andOss in the Netherlands and also at St Truiden inBelgium. Volvo Car BV is also responsible for thedevelopment and marketing of its products.

One weakness of a relatively small company likeVolvo is that the resources for investments and thedevelopment work necessary to be able to success-fully compete and grow are limited.

In order to keep development costs down, Volvohas entered co-operative agreements with othercompanies without in any way offering any of itsindependence.

Volvo BM products can be found in construction work in North A frita.

Agreements concerning light commercial vehic-les have been made with KHD of Germany, DAFof Holland and Saviem of France. Another exam-ple is the co-operative engine project for passengercars undertaken with Peugeot and Renault.

The various divisions of the Group have similaragreements, these including, for example, VolvoBM's agreement with International Harvester, Klaasand Poclain.

It is vital for Volvo to maintain its ties inSweden. It is here that the Company has its mostloyal support, it is here that the Company's head-quarters, executive management and production of

the major components are. It is not Volvo's policyto establish operations abroad to keep productioncosts down nor solely to export its products fromthat country. Volvo establishments abroad aremade to safeguard the Group's long-term existencein the hosting country, to develop a technologywhich is adapted to the environment in question -to provide a basis for our own growth and to pro-vide employment.

As a company, Volvo is Swedish, but as aproduct, Volvo is international and synonymouswith quality, long service life and good economy.

In New York, Volvo trucks are used for short haul work.Japan is an important market for the Volvo Penta range ofengines and Aquamatic outboard drives.

The Volvo Group in Sweden

Corporate Executive and HeadquartersGothenburg

Volvo Torslanda PlantGothenburg: Car assembly

Lundby PlantGothenburg: Assembly of trucks and bus chassis

Volvo PentaGothenburg: Marine and industrial engines, generating setspowered by Volvo engines.

Volvo Skövde PlantsSkövde: Petrol and diesel enginesFloby: Brake discs, brake drums, hubs and driveshaftsFlen: Marine diesel engines and reconditioning workArvika (foundry): Diesel castingsVara: Diesel engine plant. Production start-up late 1976

Volvo Bergslagen PlantsKöping: Gearboxes, rear axles and front wheel suspensions forcars. Gearboxes and front axles for trucks and buses. Transmis-sions for Aquamatic outboard drives.Arvika (forge): Forged blanks for Volvo automotive production.Lindesberg: Final drives for trucks and buses. Tractor differen-tials.Uppsala: Outboard engines.

Volvo Dalsland PlantsFärgelanda: Interior fittings for cars, mostly plasticsBengtsfors: Car upholsteriesTanumshede: Door and side panels for cars

Volvo Umeå PlantUmeå: Truck cabs, air, fuel and vacuum tanks. Brackets for tanksand running boards. Bonnet hinges for cars.

Volvo Olofström PlantsOlofström: Body sections, body pressings, pressing tools andassembly equipmentKonga: Final drive casings, frame members and other larger partsfor trucks and also fans.

Volvo BMEskilstuna: Detail production for earthmoving, forestry and agri-cultural machinesHällby: Assembly tractors and forestry machinesArvika: Loading machines, road graders and tract vehiclesHallsberg: Light combine harvestersBraås: Dumper vehicles

Volvo FlygmotorTrollhättan: Jet engines, hydraulic machines, industrial waste gasdestruction units, diesel engine components and steering gear.

Volvo Kalmar PlantKalmar: Assembly of cars

Jofa-FöretagenMalung: Tents, ice-hockey articles, skiing sticks, ski bindings,boats and life jacketsKungälv : Sailing boats, boat assemblyRyd: Boats

From an Ideato a World Wide Company1924 - Assar Gabrielsson and Gustaf Larsondecide to start a Swedish motor industry.1926 - The Board of SKF invests Skr. 200,000in the project and AB Volvo is born.

1927 - The first Volvo rolls out of the plantin Gothenburg.

1930 - Share majority in Penta plant atSkövde acquired.

1935 - AB Volvo introduced on StockholmBourse- takes over AB Penta in Gothenburg conver-ting Volvo engines for marine and industrialuse.

1941 - Share majority in Köpings MekaniskaVerkstads AB acquired.

1950 - Share majority in AB Bolinder Munk-tell, now Volvo BM, acquired.

1956 - Gunnar Engellau takes over as Mana-ging Director after Assar Gabrielsson.

1964 - Torlsanda Plant for car assembly in-augurated. Umeå Plant acquired in same year.New facilities built in Ghent, Belgium.

1965 - Bengtsfors facilities inaugurated.Assembly of cars in Ghent, Belgium. Assemb-ly of trucks and buses in Lima, Peru.1967 - Assembly of cars, Halifax in Canada.- Assembly of cars, trucks, buses, in KualaLumpur, Malaysia.

1969 - Olofström AB acquired

1971 - Gunnar Engellau is succeeded by PehrGustaf Gyllenhammar as Managing Director

1972 - Volvo's new Technical Centre inaugu-rated, costing Skr. 220 million.- the VESC safety car is presented- the new central parts warehouse is openedin Belgium- new truck plant built in Australia- new plants built at Skövde and Kalmar- acquisition of Ailsa Trucks in Glasgow,Scotland- co-operation opened with DAF in Holland- Volvo shares introduced on London Bourse

1973 - Approval for car assembly plant inUSA.- Volvo acquires Jofa AB - thereby entersthe leisure sector.- acquisition of MCB's outboard engineoperations.- Area Andino established.- co-operative agreement with InternationalHarvester (BM).

1974 - Acquisition of Ryds Industri ABsouth of Växjö, Sweden.- establishment of import and marketingcompany for Volvo in Japan with Japanesecompany Teijin Ltd.- introduction of Volvo shares on West Ger-man Bourses.- Volvo co-operation with DAF extended,Volvo acquires 75 % of share capital.- engine manufacture started in Douvrin,France

1975 - land procured on outskirts of Gothenburgfor commercial vehicle expansion.- authorisation of new plant at Trollhättan,Sweden, for hydraulic machines.- building work starts on new diesel engineplant at Vara for Volvo Skövde Plants, Sweden.- co-operative agreement with Poclain S.A.- assembly of cars starts in Djakarta,Indonesia.- assembly of trucks in Ghent, Belgium.

She is safe !