Ford Motor axes 4,000 jobs at Volvo

10 October 2008

Ford Motor's Swedish car automotive unit Volvo, part of its Premier Automotive Group, has announced another round of job cuts that will affect some 4,000 employees worldwide following the 2,000 jobs it cut in June 2008,  taking the number  of jobs eliminated this year to 25 per cent of its workforce, citing ''a rapidly deteriorating auto market.''

The cuts will affect 2,000 blue-collar workers and 700 white-collar workers in Sweden, while an additional 600 employees will be laid off outside Sweden, and 700 contracts with consultants will be terminated bringing its total planned reduction in employees to 6,000.

At the beginning of the year, the employee strength was about 24,500 worldwide, including 17,000 in Sweden. A significant part of the layoffs will come from its main Gothenburg plant where it employs 13,000. Jobs will also be cut at its second plant in Ghent, Belgium, and at overseas sales subsidiaries.

As the automobile industry becomes one of Europe's first real economy casualties of the credit crisis, coupled with a weak demand and surging raw material costs, Volvo suffered a pretax loss of $271 million in the first half of 2008 and the company said it will save $562 million by downsizing.

Ford's only remaining Europe-based brand, which it acquired in 1999 had said in June 2008, that it could not sustain employment of 24,300 people because of the weak dollar, rising raw material prices and declining sales in the United States and Europe.

The company said in a statement, "To meet the rapidly deteriorating market situation in the global car industry, the management team at Volvo Car Corporation has decided to initiate further structural changes in all parts of the business."