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TRUCKS

Volvo drops bid to boost executive pay

Sweden’s Volvo Group bowed to criticism and said it was scrapping a proposal to raise executive bonuses on Wednesday, the same day that its truck making subsidiary announced it was stopping production at one of its plants because of dropping demand.

“The board of AB Volvo has today decided to withdraw the proposal to the annual general meeting to raise the ceiling for the performance-based variable salary from 50 percent to 60 percent of the fixed salary for the 250 most senior executives in the Volvo Group,” Volvo said in a statement.

“The board also withdraws its proposal to increase the number of shares in the long-term incentive program for these senior executives,” it added.

The proposal announced last month sparked angry reactions within Volvo, in political circles and among the public given the dire market conditions, the company’s large fourth quarter losses and the job cuts it has announced.

“We have noted that the proposal presented created debate, internally as well as externally … As a result, the board does not want to present a proposal that adversely affects cooperation within the group in these exceptional times,” Volvo chairman Finn Johnsson said in the statement.

Volvo posted a net loss of 1.35 billion kronor ($151 million) in the fourth quarter of 2008, and has announced more than 5,000 job cuts in recent months.

The Swedish company had said when it presented the plan that a study showed its executive management received lower pay than in comparable companies.

Proof of the tough times facing Volvo was reinforced on Wednesday when Volvo Trucks spokesman Stefan Karlsson told AFP that production at the Tuve plant in Gothenburg “will be stopped several days here and there every month, totaling about a week a month.”

“Time will tell how long we will need to do this, depending on when demand starts to pick up again,” he said, adding: “There are no signs of an upswing yet.”

Employees, who will receive full pay, will either be entitled to days off, professional training or maintenance projects, he said.

The Tuve factory was Volvo Trucks’ second-biggest assembly plant in 2008, rolling out 25,300 trucks. In 2007, it produced 24,000 trucks.

AUTOBAHN

Germany’s first electric Autobahn for hybrid trucks opens near Frankfurt

The 'eHighway' project, which sees hybrid trucks powered via overhead lines for the first time on a public Autobahn in Germany, launched on Tuesday.

Germany’s first electric Autobahn for hybrid trucks opens near Frankfurt

The 5km test track went into operation on the A5 between Langen/Mörfelden and Weiterstadt, south of Frankfurt, reported the Hessenschau.

The project, called Elisa (electrified, innovative heavy traffic on the Autobahn) is being tested in real traffic by five logistics companies with hybrid, battery-powered trucks on one of the busiest stretches of Autobahn in Germany.

A hybrid electric truck is a form of truck that uses hybrid electric vehicle (HEV) technology instead of using only a combustion engine. As the pictures show, the specially designed trucks can be charged as they drive beneath the installed overhead wires.

SEE ALSO: German government rejects speed limit on Autobahn

The aim is to collect and analyze data that could result in the project being rolled out in other parts of the country.

However, at a whopping €14.6million, the project, being funded by the government's Environment Ministry, isn't cheap.

The technology is intended to help reduce the pollution of heavy goods vehicles, with the test set to run until the end of 2022.

Will the e-highway affect other traffic?

The power feed on the 5km overhead lines is installed in both directions of travel (towards Frankfurt in one direction and Darmstadt in the other) and has been tested over the last five months. However, now it’s ready for more frequent use, according to project managers.

Truck maker Scania worked with Volkswagen and Siemens for the electric road project.

The overhead lines can be seen on the A5. Photo: DPA

Over the course of the pilot, questions such as how the electric Autobahn influences other traffic and how much pollution goes down will be addressed by the Technical University of Darmstadt, which is located near to the test track.

The project developers believe traffic will not be adversely affected by the electric trucks. The vehicles don't have to slow down when docking and undocking from the overhead charges.

After charging the trucks can continue carry on in battery mode. If the vehicle's batteries become empty, the hybrid engine with diesel takes over the drive.

SEE ALSO: Eight things you never know about the German Autobahn

Is the investment worth it?

Doubts have been raised about the cost-benefit ratio of the pilot project. Micheal Kraft, vice president of the Hessian Motor Trade Association, considers the technology, which is already used in Sweden, to be uneconomical.

“These are vehicles that are only suitable for very specific requirements and will play a minor role in the long term,” he says, reported the Hessenschau.

A total of three eHighway projects have been announced nationwide: In addition to the German states of Hesse and Schleswig-Holstein, Baden-Württemberg will also be launching a test track.

Construction for the A1 in Schleswig-Holstein is expected to be completed over the course of the year, while in Baden-Württemberg, work hasn’t started yet.

The world’s very first eHighway runs on a motorway in Sweden,.

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