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VOLVO

Volvo to lay off 600 workers

Swedish truck maker Volvo is to cut 600 jobs in Sweden and Belgium on top of the 1,400 redundancies announced last month.

Published: 29 October 2008 18:33 CET
Volvo to lay off 600 workers

“In addition to the 1,400 jobs (announced last month) we’ve now announced

600 more, so now it’s in total 2,000 jobs,” Volvo Trucks spokesman Tommy Kohle told AFP.

He said there would now be a total of 520 permanent job cuts in Volvo’s cab factory in the northern Swedish town of Umeå and 860 in the southwestern town of Gothenburg.

In Belgium, a total of 600 temporary contracts would be discontinued, he said.

“The problem is that since we made (the September 30) announcement, the development in the world economy has continued as you know to go the wrong way.

“The effect is that many customers now want to wait and see how things develop,” Kohle said.

“We still know that there is an underlying transport need … Society will go on. They will use the trucks they have, but we expect that they will wait for the financial turmoil to stabilize before putting in any new orders,” he said, adding “we need to adjust our capacity to this situation.”

VOLVO

Sweden’s Volvo regains strength after pandemic puts brakes on earnings

Swedish truck maker Volvo Group was hit by a sharp drop in earnings due to the coronavirus pandemic, but business rebounded at the end of the year.

Published: 3 February 2021 12:21 CET
Sweden's Volvo regains strength after pandemic puts brakes on earnings
Volvo Group CEO Martin Lundstedt. Photo: Adam Ihse/TT

In 2020, the group saw “dramatic fluctuations in demand” due to the Covid-19 pandemic, chief executive Martin Lundstedt said in a statement.

For 2021, Volvo raised its sales forecasts in its trucks division – its core business – in Europe, North America and Brazil.

However, it said it also expected “production disturbances and increased costs” due to a “strained” supply chain, noting a global shortage of semiconductors across industries.

The truck making sector is particularly sensitive to the global economic situation and is usually hard hit during crises.

In March, as the pandemic took hold around the world, Volvo suspended operations at most of its sites in 18 countries and halted production at Renault Trucks, which it owns, in Belgium and France.

Operations gradually resumed mid-year, but not enough to compensate for the drop in earnings.

With annual sales down 22 percent to 338 billion kronor (33.4 billion euros, $40 billion), the group posted a 46 percent plunge in net profit to 19.3 billion kronor (1.9 billion euros).

Operating margin fell from 11.5 to 8.1 percent.

However, the group did manage to cut costs by 20 percent.

“We have significantly improved our volume and cost flexibility, which were crucial factors behind our earnings resilience in 2020,” the group said.

Volvo's business regained strength in the second half of the year.

“Customer usage of trucks and machines increased when the Covid-19 restrictions were eased during the summer and this development continued during both the third and fourth quarters,” it said.

“Both the transport activity and the construction business are back at levels on par with the prior year in most markets.”

For the fourth quarter alone, the company reported a 38-percent rise in net profit from a year earlier.

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