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May 20, 2008

SWEDEN: Volvo wields Torslanda night shift axe

Ford's Volvo Cars unit plans to axe the night shift at its Torslanda plant in western Sweden.

Ford’s Volvo Cars unit plans to axe the night shift at its Torslanda plant in western Sweden.

Volvo Car Corporation spokeswoman Maria Bohlin told just-auto that this “third shift” employs 700 building the V70 wagon and its XC70 four wheel drive variant, the S80 large sedan and XC90 crossover.

She said that Volvo Cars chief executive officer Fredrik Arp told local newspaper Goteborgsposten in an interview that the cuts were necessary but no firm decisions on the number of workers or timing had yet been made.

“We have too much capacity in Torslanda. The decision will be taken fairly soon and my assessment is that we will decide to enter negotiations with the union about stopping the third shift sometime around the turn of the year. Whether it will be in December or January remains to be seen,” Arp was quoted as saying by the Associated Press (AP).

“We don’t have the luxury to have 500 employees who aren’t occupied for the day,” he added.

Negotiations with unions were expected to begin in the next few weeks, Bohlin said. Some of the 700 affected workers might be offered jobs on other shifts, she added.

She earlier told AP Volvo would reduce output from 51 cars to 44 per hour at the end of June.

Meanwhile, the Wall Street Journal (WSJ) said the production cut, which could affect up a third of workers at Torslanda, one of two Volvo Cars plants in Europe, comes amid speculation that Ford is priming Volvo for a sale.

Though Ford has said publicly it doesn’t plan a sale, CEO Alan Mulally has told top executives he wants to eventually seek a buyer for the brand, the newspaper said, citing people familiar with the matter.

The WSJ noted that Jerome York, who advises one of Ford’s largest outside investors, Kirk Kerkorian, endorsed the idea of a sale earlier this month, saying he believed Volvo might be sold some time in the next 18 months.

Bohlin said any question of selling Volvo was a matter for Ford and declined to comment further.

Graeme Roberts

No surprise – analyst

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