Success Sweden style

LEE DONG-HYUN
The author is a deputy industry 1 team editor of the JoongAng Ilbo.

What you might notice first at the baggage claim at Gothenburg airport in Sweden is an advertisement by SKF, a bearing manufacturing company. “Rotation for Life” is the slogan, and most people wouldn’t know what SKF does. Those who like cars would be reminded of Volvo’s slogan, Volvo for Life. Volvo is named after the Latin word volvere, meaning “to roll,” so the slogans of SKF and Volvo have the same meaning. In fact, Volvo was established as a subsidiary of SKF. Founders Assar Gabrielsson and Gustav Larson were engineers at SKF, and the car they built was the origin of Volvo. In 1935, SKF sold Volvo and focused on the bearing business.

SKF is an industry leader with 30 percent global market share. As of 2018, its revenue was 10.6 trillion won ($8.87 billion), with more than 1.3 trillion won in operating profit. It is a hidden champion achieving double-digit operating margins every year. On Sept. 1, I visited the SKF headquarters in Gothenburg and asked about its secret to remaining as a leader in material and parts for more than 100 years. SKF showed me an automated, unmanned factory and said that only 20 people were working at the factory where 100 people had worked.

In Sweden, the social democratic country that is a role model for universal welfare, what about the 80 people who lost jobs? SKF’s communications director Theo Kjellberg said that the union agreed that the priority was to enhance competitiveness for the company. He explained that the government and the company set up a re-education program and helped them to move to other positions in the company or to another company.

A hidden champion is not created overnight. It is possible when members agree and cooperate for mutual interests for a better future. Social compromise and Northern Europe-style welfare cannot be attained only with words.