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Volvo Buses to shut down Swedish factory

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Volvo Buses to shut down Swedish factory
11:56 CEST+02:00
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.

“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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