Ericsson proposes Volvo CEO as new chairman

Sweden's Ericsson, the world's biggest mobile networks maker, said on Thursday it planned to appoint truck maker Volvo's top executive as its new chairman.

Ericsson said it was proposing that its annual general meeting elect Leif Johansson, the chief executive of the world number two truck maker who is due to step down later this year after a decade at the helm.

There had been speculation Johansson would succeed Michael Treschow as chairman of the telecom giant after Treschow, who is also chairman of consumer products group Unilever, said he would leave Ericsson this year or the next.

"Among the Swedish candidates, I think he is among the most suitable in terms of knowledge about how a global company works, and he is still young enough to hold the job for a couple of years," Nordea analyst Daniel Djurberg said.

"He is also a trained engineer, so he will have some grasp of the radio waves as well. He also has an ability to make uncomfortable decisions, so in my world he fits the ticket quite well," he added.

"On the negative side, there is a question mark as to whether he has the appropriate network in the telecom field."

Ericsson has weathered the global downturn and tougher competition in the network gear market relatively well though it has been cutting costs over the past two years as revenues across the industry have been under pressure.

During Treschow's almost 10 years as chairman, Ericsson also held on to its leading market position and capitalised on the tough times as others have suffered and picked up the bulk of bankrupt Nortel Networks operations as well as other assets.

Johansson's final years at Volvo have been more dramatic with the truck maker briefly slipping into the red and cutting thousands of staff as the vehicles market suffered its worst plunge in decades in the wake of the global financial crisis.

Johansson faced scattered criticism for his handling of the crisis, but market demand as well as Volvo's share price have rapidly recovered over the past 18 months, putting to rest much of the scepticism resulting from the downturn.

Ericsson also said it was proposing to the April 13 general meeting that Jacob Wallenberg, a member of Sweden's powerful Wallenberg family whose investment group Investor AB owns a major stake in Ericsson, be elected to the board.