Volvo Trucks is downsizing its European production system in response to the decline in truck demand from the European market. The company will be looking to axe 1,400 jobs at its Ghent plants in Belgium, and Gothenburg and Umeå plants in Sweden. A cost-reduction plan will also be brought in to help deal with the lower sales volumes and increased raw material costs.
The growth in demand over the past few years has seen Volvo Trucks increase its capacity, adding night shifts to help reduce delivery times. But this has been a costly temporary solution. Now with the European truck demand slowing, Volvo reckons the adjustments will rebalance production capacity to more normal levels.
The downsizing affects up to 400 temporary employees in Ghent, where the temporary night shift will close by the end of December this year. In Gothenburg, the plan is to reduce the evening shift, which will affect up to 610 employees. In Umeå, approximately 370 employees are affected as the cab plant is planned to downsize in April next year.
“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. To mitigate the impact of cost-inflation a cost-saving program will be introduced throughout the entire Volvo Trucks organization and it will include measures to improve efficiency in the commercial operations,” says Staffan Jufors, president and chief executive of Volvo Truck Corporation.