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VOLVO

Volvo to cut 900 jobs

Volvo Group has announced that it is to cut 900 jobs from its Powertrain operations in Sweden.

Published: 11 November 2008 13:37 CET
Volvo to cut 900 jobs

The redundancies will affect 580 workers in Skövde, 110 in Gothenburg and 210 in Köping, according to a statement from the local manager for Volvo Powertrain in Skövde.

Volvo’s engine factory in Skövde will be hardest hit by the cutbacks, with 580 of a total 3,000 workers set to lose their jobs.

“We have noticed a drop in demand since the summer and have adapted by cutting back on part time workers and recruitment companies.

“Those measures mean we will have 400 fewer staff members by Christmas, but it’s not enough,” manager Magnus Holm told the TT news agency.

Volvo Powertrain employs a total of 6,300 people in Sweden. The Köping plant produces gearboxes, while the workers in Gothenburg are involved with purchasing, construction and product development.

“A downturn in the economy, the continuing decline in North America and global financial worries have all contributed to putting the brakes on demand,” said Holm.

Volvo Group has in recent months announced a series of job cuts across its operations, with 1,400 redundancies at Volvo Trucks, 1,350 at Volvo Construction Equipment and 90 at Volvo Penta.

Ford-owned Volvo Cars has also felt the brunt of the industry slowdown, with 3,900 job losses in Sweden so far this year.

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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