“The planned reductions are not only being undertaken to rebalance capacity, but also to increase efficiency in production and to compensate for the higher raw material prices that we are now experiencing,” said Staffan Jufors, President and CEO of Volvo Truck Corporation, in a statement.
Volvo said it would to reduce the night shift at its Gothenburg plant by 610 workers, while around 370 employees at the company’s Umeå cab plant can expect to lose their jobs by April 2009.
In addition, 400 temporary night shift workers at Volvo’s plant in Ghent, Belgium will be let go at the end of December.
Volvo Trucks said it would now enter into negotiations with unions about implementing the proposed cutbacks.
In explaining the reason for the drop in demand in the European truck market, Volvo cited the recent financial uncertainty and the corresponding tight credit markets. Not only have customers had a harder time securing financing for new trucks, but many are delaying the purchase of replacement vehicles altogether.