How an acquisition affects the relation between the labour union and the company : A case study of Volvo Cars and IF Metall

Abstract: Abstract Background: Between 1991 and 2001 the number of firms acquired by other firms tripled (Johnson & Scholes, 2005). This trend has led to a huge increase in cross-border acquisitions, where Sweden is no exception. Statistics show that companies with U.S. origin are the ones that acquire most Swedish companies (Nutek, 2007). Hence, acquisitions made by U.S. businesses will presumably influence managerial issues in Sweden in different ways. Problem and purpose: An industry that is characterized by many merger and acquisitions is the car industry. Ford Motor Company’s acquisition of Volvo Cars is of particular interest to address. Several conditions within the company changed due to the acquisition process, including the type of management. This might have affected Volvo Car’s relation with its labour union IF Metall to some extent, and thus, creating an interesting area of research. The purpose with this thesis is to investigate how the relation between a labour union and a company is affected when U.S. and Swedish types of management are mixed as a result of an acquisition. Method: In order to fulfill the purpose of this thesis a qualitative case study approach is used. The primary data is collected through interviews with people connected to Volvo Cars and IF Metall. In addition to this the authors incorporated secondary data which is based on literature, articles and academic publications. Conclusions: When a U.S. company acquire a Swedish company the relation between the labour union and the acquired company are affected in several ways. The labour union and the members can expect to have less influence in the decision making process, there will be less resources devoted to work related training programs, the competence level of the members will decrease and the working conditions will become worse.