Volvo to cut 4,000 jobs worldwide
Times are tough for Sweden's safest automaker. Ford-owned Volvo has seen its sales decline by alarming amounts so far this year. In fact, in last month's By The Numbers post, the automaker's 51.8% drop in U.S. sales trailed only HUMMER's stratospheric plunge. Fewer cars produced means fewer workers are needed, and with numbers like that, it's no wonder that Volvo needs to cut the rank and file a bit. Volvo announced today that 4,000 jobs worldwide will be cut. That figure includes some 2,230 employees at Volvo Car Corporation in Gothenburg, Sweden as well as 1,300 people, including contractors, outside its home country. After all is said and done, the total number of job cuts, including those already announced before today, will be about 6,000. The sober-sounding press release is pasted after the break.[Source: Volvo]
PRESS RELEASE:
Further Structural Changes Necessary at Volvo Car Corporation
GOTHENBURG – October 8, 2008: To meet the rapidly deteriorating market situation in the global car industry, the management team at Volvo Car Corporation has decided to initiate further structural changes in all parts of the business. This morning, the Swedish Public Employment Service has been informed of additional redundancies affecting around 2,000 blue collar employees and 700 white collar employees in Sweden. Outside Sweden, an additional 600 employees will be made redundant and some 700 contracts with consultants will be terminated.
On June 25th an announcement was made on the reduction of 2,000 people including 500 consultants. The total redundancy actions now planned to be initiated account for 6,000 people worldwide, of which 1,200 are consultants.
"These are difficult times for the car industry in general, including Volvo. These actions are necessary to create a new and sustainable Volvo Car Corporation - a company with more focused operations and structure," says President and CEO of Volvo Car Corporation, Stephen Odell.
"The unstable economic environment has resulted in a very unpredictable situation, and the downturn in the global car industry is more drastic than expected," Odell continues.
The notice handed in today to the Swedish Authorities includes 2,230 employees at Volvo Car Corporation in Gothenburg, 410 employees at Volvo Cars Body Components in Olofström and 60 employees at the Volvo Cars Engine Plant in Skövde/Floby. The company is also planning a reduction of 600 people outside Sweden.
In an earlier press release (September 12th), Volvo estimated that approximately 900 blue collar employees would be affected. Given the turbulence in the world economy over the last few weeks, however, it is clear that further costs saving actions are necessary for the company to manage the difficult market situation.
The process to negotiate a new organization commenced on June 25th. Today's announcement will delay these negotiations with the unions as it needs to be integrated with the previous plan. The new organization is expected to be in place by the end of the year.
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Reader Comments (Page 1 of 1)
Hugh G 5:47PM (10/08/2008)
Aren't the countries with a lot of growth like China and India buying cars? I know sales are down in the US and Europe, but with the economies in some of these other countries growing like crazy, I'd think sales lost here would made up for over there? No?
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Crackberry Addict 5:47PM (10/08/2008)
hopefully once Volvo implements their fuel saving tech, they'll sales will go up as will they mpg. imo
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Xcountryflyer 5:53PM (10/08/2008)
None of Volvo's US cars are very compelling. And most of them are too expensive. Like Saab, Volvo seemed to have lost its niche fan bases in an attempt to woo more buyers and ended up worse off due to bad management by Ford & GM.
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Cardude 5:54PM (10/08/2008)
Bummer. Volvo is making some really hot cars now.
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C$30$ 7:14PM (10/08/2008)
I hope they cut Mr. Geodano (spelling) from Hassal Volvo in Glen Cove, that man lies too much and wanted me to put down $ 5k on a stripped C30 lease.
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StarkRavingMad 7:17PM (10/08/2008)
Volvo make decent cars, but they have hopelessly lost their plot. Couple of pointless cars like C30 and C70, combined with boring styling like new S80 and coming too late to SUV party with the XC60 just seals the deal on it's coffin. The swedes need to think outside the box if they hope to survive in this new dawn of automobiles. What they need is to win back their old fans with some extremely fast sleeper, focusing on making better estate cars, forget all the idea of "swedish luxury", and get on the "hybrid vehicle" bus quick.
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Jack Forette 11:38PM (10/08/2008)
I feel bad for those being laid off. Having said that, Volvo has lost their way. I was interested in the C30 which had a sticker price of $28,800 and the best lease rate I could get was $465/month which was more than the $36,000 Infiniti G35 I just turned in. And the G35 is in a whole different league than the C30. Volvo's are way overpriced, unspectacular cars that pale in comparison to their competition. That's why they are struggling so much now.
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