Autoliv, the world’s biggest maker of car seat belts and air bags, will shift more production to Estonia, meaning the loss of 275 jobs in Sweden, the company said.
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According to Reuters, the company blamed pricing pressures for the move. Other car parts makers have already complained about the rising price of steel as did Swedish home appliances maker Electrolux, when it issued a profit warning due to the cost of the metal.
The Autoliv move reportedly will affect employees at its Vargarda plant in southwest Sweden and will run over the next two years. Jobs at the plant have already been cut from around 1,200 to 1,000 by natural wastage and using fewer temporary staff.
“We cannot rely on these measures any further and we have to lay off fixed staff,” CE0 Lars-Gunnar Skotte said in a statement cited by Reuters. “Otherwise it will threaten profitability and our ability to invest and continue as a successful firm in Sweden.”
Autoliv is among a host of Swedish companies that are moving production to cheaper manufacturing bases in eastern Europe and Asia as they look to boost their bottom lines, the news agency noted.
Swedish prime minister Goran Persson has complained about lower tax rates and labour costs in the new European Union members draining jobs from the older EU member states.
In August Autoliv reportedly said it would double capacity at its seat belt manufacturing plant in Romania. In May it said it would also switch more procurement to low-cost countries. Around half of Autoliv’s revenues are eaten up by purchasing costs.
The latest decision includes shifting production of seat belts and cutting around 175 jobs in Sweden. Rationalisation measures will reduce headcount by a further 100 jobs, Reuters added.
