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VOLVO

Volvo Buses to shut down Swedish factory

Volvo Buses is closing down its facility in Säffle in central Sweden and concentrate on production in Poland, the company announced on Wednesday, putting 400 jobs at risk.

Published: 3 October 2012 11:56 CEST
Volvo Buses to shut down Swedish factory

“The demand for new buses in Europe has dwindled steadily over the last few years at the same time as the price has been forced down, especially on the Nordic markets,” Håkan Karlsson CEO for Volvo buses said in a statement on Wednesday.

The company is planning to concentrate their manufacturing of complete buses to their Polish facility, which means that the Säffle production line will fall silent in 2013.

The closure will affect 330 contracted workers as well as some 60 consultants. The company will retain their technical support department in Säffle, which amounts to some 50 positions.

“By concentrating the production of finished buses to one factory we can lower costs and thereby turn the negative trend around,” Karlsson said.

The company only sold 2,498 buses during the second quarter of 2012 compared to 3,127 during the same period last year. The decrease was visible in all markets, according to the company’s quarterly report. Orders have also slowed down, decreasing by 14 percent during the last quarter.

The company will start negotiations with unions about the cuts at the same time as it assesses the possibility of identifying equivalent work opportunities within Volvo, Karlsson said in a statement.

The Polish factory has four times as large a capacity as the Swedish one in Säffle and Volvo is expects that moving production there will negatively affect the company’s earnings during the fourth quarter of 2012, by some 100 million kronor ($15 million).

TT/The Local/rm

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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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