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Volvo Cars to close Uddevalla plant

TT/Rebecca Martin · 3 Oct 2011, 16:57

Published: 03 Oct 2011 16:57 GMT+02:00

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"The low volumes in the Uddevalla plant do not justify continued production," Stefan Jacoby, Chief Executive of Volvo Car Corporation said in a statement.

Volvo has been building cars in Uddevalla since 1989, although operations have been carried out in a joint venture with its majority shareholder Pininfarina S.p.a. since 2005.

But the plant in Uddevalla has only been producing at 65 percent of its capacity, according to the company. In 2010 the factory manufactured 10,000 cars.

Production will cease at some point in 2013, but the exact date has yet to be decided.

”We don't know exactly when that will be yet,” said Olle Axelson, head of informations at Volvo, to news agency TT.

According to Axelson, negotiations with the unions will be commencing immediately.

”All the employees will be offered continued employment within Volvo Cars,” he said to TT.

The Uddevalla plant employed some 600 workers. The option they will have is to move or commute to the company's other factories in Gothenburg or Skövde, Floby or Olofström – all locations at a significant distance from Uddevalla.

”Exactly how this will work is too early to say. We have one and a half years left, so there is time to consider different options,” Axelson told TT.

Story continues below…

Jacoby said in the statement that he hoped that as many as possible of the Uddevalla workers would choose to take up other employment within the company.

"We will now look into when a next generation Volvo convertible can be on the market and where it should be manufactured," said Jacoby.

Volvo Car Corporation is owned by Chinese Hegelian Geely Holding Group Co.

TT/Rebecca Martin (news@thelocal.se)

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Your comments about this article

19:12 October 3, 2011 by Keith #5083
Good to hear ALL the workers are being offered continued employment.
20:08 October 3, 2011 by Hamish
The next news headline will read.....

Owner of Volvo moving all production to china but employees offered employment ......in china
23:14 October 3, 2011 by ionut
Life sux...and then you die
02:35 October 4, 2011 by millionmileman
This is another reason to start production as soon as possible at Saab Trollhättan is only a stone's throw down the road and the whole of Western Sweden is affected.

The workers need to produce or they won't have enough money to buy new cars.
19:35 October 6, 2011 by Keith #5083

With record sales (outside of China) why would any sensible businessman wish to move production to China? Volvo seems to be doing pretty well and the European market would certainly react adversely if all cars were produced in China.

Cost/profitability considerations necessarily mean that smaller production units may not be cost effective. But I don't think Gothenburg is yet listed as a Chinese city is it?
07:43 October 11, 2011 by karex
@Keith Totally agree with you. Moving everything to China would simply kill western sales. I think they're too smart to do such a stupid thing. I expect one of the major reasons for buying a western auto make is precisely to gain the western market and more importantly the established distribution network. Chinese companies have long tried to come into the market only to crash and burn because they could not offer the prolonged sustainability of their products to their customers: distribution and service network.
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