Further structural changes necessary at Volvo Car Corporation

This morning, the Swedish Public Employment Service has been informed of additional redundancies affecting around 2000 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 2000 people including 500 consultants. The total redundancy actions now planned to be initiated account for
6000 people worldwide, of which 1200 are consultants.

President and CEO of Volvo Car Corporation, Stephen Odell, said:

"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."

"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 continued.

Roula Beiruty, Marketing Manager of Volvo Cars ME, said: "We are totally aware of the severity of the crisis that the world is facing. Volvo Cars ME is doing the necessary to ensure that no restructuring will take place in the region."

The notice handed in today to the Swedish Authorities includes 2230 employees at Volvo Car Corporation in Gothenburg, 410 employees at Volvo Cars Body Components in Olofström and 60 employees at the Engine Plant in Skovde/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.