Volvo Resumes Some Production in Japan Next Week

Volvo estimates that the production of trucks outside Japan will not be impacted.

Following inspections and repairs Volvo estimated that production at UD Trucks' facilities in the Tokyo area should be able to resume on a limited scale on March 28.

With regard to sub-suppliers, the company said that intensive efforts are in progress aimed at surveying all stages of the supplier chain. Volvo estimates that the production of trucks outside Japan will not be impacted to any major extent; however, Volvo Construction Equipment's production of primarily excavators in Korea and China is expected to be affected due to a shortage of key hydraulic components.

The Volvo Group reported that it has suffered fatalities that include two Japanese co-workers, while a third remains missing. "This is a devastating catastrophe that has hit Japan and I know I'm speaking on behalf of everyone in the Group when I say that our thoughts go to those who have lost their lives, to our missing colleague and to all their families, as well as to the thousands of others who have been affected in Japan," said Leif Johansson, Volvo's CEO.

Among other measures, the company has arranged aid shipments of food and other necessities for the affected sections of the workforce, as well as arranging evacuation sites on the plant area for its employees and their relatives. UD Trucks/Volvo Group has offered the Japanese government assistance in the form of equipment (mainly trucks) and funds in a total amount of JPY 100 million (US$ 1.24 million.) The company also has arranged a global collection for the Red Cross to which employees can donate money and the company will match the total amount collected with an equally large donation.

During the earthquake, parts of the office buildings were also damaged, including the building that houses R&D activities; however, this facility has also been surveyed and it is expected that work can resume work on March 22, the company said. Six of UD Trucks' 150 proprietary service and dealer facilities in Japan have been hit, three of which were seriously damaged.

The Volvo Group has some 9,500 employees in Japan and three production plants outside Tokyo. Sales in Japan accounted for 7% of the group's total sales in 2010, with about half deriving from new product sales and the remainder from the aftermarket.

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