"In a global industry such as that one, the benefits of large-scale operations increase in importance and the industry is accordingly in a consolidation phase, with a growing number of alliances and the formation of increasingly larger and more efficient units.

Leif Johansson

Volvo's ambition has been to effect a merger with Scania is well known. However, we have not been able to reach an agreement with Scania's principal owner, Investor, with respect to a valuation of the company. But opportunities for gains resulting from coordination of certain of our operations and Scania's remain but in lesser extent. We have therefore made a proposal to Scania and Investor to explore the forms for future cooperation."

"The proposal involves working out during 1999 a cooperation agreement to develop synergies and the competitiveness of both companies. The intention is that these synergies should be developed in so-called "precompetitive stages -- in noncompetitive areas. It is intended that the agreement be long-term. We estimate that such a cooperation could reduce yearly costs by up to 1 billion SKR within i three year periodIt is foreseen that forms of cooperation and decision-making structures can be developed in a manner that will achieve synergies without bringing into question the identities and independence of the companies.

"This proposal has not yet occasioned any formal reaction from Scania or Investor. However, I am convinced that when the dust has settled Scania will not decline the opportunity to conduct a dialog with respect to the matters noted above. I also think that it is important for our respective companies to have a "quiet period." An orderly dialog would benefit both of us and would also help to end the wave of speculation about ownership matters that has characterized the spring."

As regards Volvo's acquisition of more than 20 percent of Scania's shares, Leif Johansson says:

"We have the greatest respect for Scania and our ambition is to strengthen relations between the two companies. It therefore appeared commercially sound and completely natural to take advantage of the opportunity that was offered to acquire an ownership interest of more than 20 percent at a reasonable cost -- and thereby the opportunity to report Scania as an associated company. With this percentage of ownership we have signaled the seriousness of our interest."

On Friday, April 30, Volvo announced that its holding in Scania amounted to 20.04% of the voting rights and 20.94% of the share capital. However, as a result of transactions completed during the holidays, Volvo acquired an additional 161,458 Series A shares and an additional 990,000 Series B shares. Volvo's holding in Scania thereby amounts to 20.3% of the voting rights and 21.6% of the share capital.

Hydrogen is an energy carrier that can be produced from water in an environmentally compatible manner and during the combustion process combines with the oxygen of the air to be condensed back into water. "BMW banked on this energy carrier very early on and has a distinct edge above all in the requisite engine technology", said Christoph Huß, BMW’s Board of Management administrator for traffic and environment. The big advantage of hydrogen produced in an environmentally compatible manner is that no additional greenhouse gas is developed.

More than a dozen reputable German companies have planned and built the world’s first fully automatic liquefied hydrogen filling station at Munich Airport: ARAL, BMW, GHW/HEW, Grimm, HDW, IAW, LINDE, MAN, Mannesmann, Neoplan, Siemens and Flughafen München GmbH. The safety of the filling station has been tested and certified by Bavaria’s TÜV (Vehicle Inspectorate). The State of Bavaria sponsored the 34-million deutschmark pioneering project at 50 percent.

This is the first project world-wide to test innovative technologies under the tough operating conditions of an airport: The production and storage of hydrogen as a compressed gas or - at minus 250°C - in a liquid state and refuelling by means of robots.

For the foreseeable future, though, this high-tech filling station will see only very few customers, for hydrogen produced in an environmentally clean manner is still significantly more expensive than petrol or diesel. "What is now necessary, is the clear political will to make this ecologically very meaningful technology succeed also from an economic perspective", said Christoph Huß, BMW’s Board of Management administrator.