New Volvo boss Stephen Odell has pledged to turn around the struggling Swedish car-maker as early as next year, just-auto has learned.
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Odell made this aggressive message known to senior managers inside the company and, just a week after he officially took the reigns at Volvo, the company has axed a further 4,000 jobs on top of the 2,000 announced in June.
“Stephen wants this turnaround very fast,” said Volvo spokesman Olle Axelson.
Volvo has now pledged to cut a quarter of its 24,300 workforce in the space of four months in response to a pre-tax loss in the first half of the year of US$271m.
The job cuts are a mix of white and blue collar and consultant positions, with the bulk of them factory-floor jobs. Overall Volvo is losing 2,900 factory-floor workers, 1,800 office workers and 1,200 consultants, a deep change at Sweden’s biggest exporter.
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By GlobalDataThe cutbacks are a key plank in Odell’s plan to get Volvo back in the black by reducing the production break-even point to between 350,000 and 370,000 units a year.
Volvo needs to re-size its operation around lower production and sales figures, because the tough US market, Volvo’s single biggest, will drag sales down to around 400,000 units this year compared to 458,000 in 2007.
Volvo is also understood to have scrapped its long-term strategic goal of 600,000 cars a year, a target set around 2000/2001 when Ford’s now-disbanded Premier Automotive Group was getting into its stride.
Volvo’s main plant at Gothenburg, which builds the S80, V70, XC70 and XC 90, is bearing the brunt of the cuts with 2,250 shop-floor jobs and 1,085 office jobs going.
Its second assembly plant at Gent in Belgium, which builds the C30/S40/V50, is suffering fewer cutbacks with 900 jobs going in total, despite the imminent launch of the XC60 soft-roader.
A body plant at Olofstrom will lose 350 factory and 110 office jobs while the engine plants at Skovde and Floby will share 60 lost positions.
Odell has moved fast to put his level headed new strategy in place.
Volvo was braced for a further round of job-cuts at last week’s Paris show, the week that Odell officially took on the job of president and CEO.
Julian Rendell
Paris show interview with Volvo’s COO
