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INDIA

Indian Volvo workers strike over pay

About 600 employees of a Volvo bus plant near Bangalore in India are striking for better pay and the return to work of four colleagues suspended following a dispute, a spokesman for the Swedish group said on Tuesday.

The strike has lasted for a week, Per-Martin Johansson told AFP, but a labour conflict which has slowed down production has been going on for about three months, he added.

“The union has asked for higher wages and the return to work of the four employees who were suspended,” Johansson said.

Four of the plant’s employees were suspended following a dispute at the plant in April, during which they allegedly physically assaulted a manager.

During the three month labour conflict some employees have worked less or not at all in protest.

The conflict has set the plant’s production pace back 60 buses, Johansson said. The factory, in Hoskote, about 35 km from Bangalore, rolled out 535 buses last year.

Johansson would not comment on the cost of the labour conflict to the Swedish company, but Indian financial newspaper Business Standard said it had cost “close to 50 crore rupees” or about $10 million to Volvo.

Volvo Group – which makes trucks, buses and boat and aircraft equipment – does not include the Volvo Cars brand.

Volvo Cars was sold in 1999 to US auto giant Ford, which in turn completed the brand’s sale to China’s Geely on Monday.

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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.

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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