Volvo AB (IW 1000/100), the Swedish bus, truck and construction-equipment consortium, on Wednesday said it is closing its only bus factory in Sweden in order to consolidate production in Wroclaw, Poland.
This planned restructuring "means that production at the Volvo Buses plant in Saffle, Sweden, will be terminated at end June 2013, provided that the necessary union negotiations have been completed by then," the company said in a news release.
The Swedish plant, which now employs 330 workers and 60 consultants, will become a technical center with about 50 people on the payroll.
"The demand for new buses in Europe has dropped steadily over the past few years, paralleled by considerable pressure on prices, particularly in the Nordic markets," said Hakan Karlsson, president of Volvo Bus Corp.
"By concentrating the production of complete buses in one single plant, we can reduce our costs and thus reverse our negative profitability trend," he said.
The relocation will negatively impact the Volvo Group's operating profit in the fourth quarter by about 100 million kronor (12 million euros, $15 million), the company said.
Copyright Agence France-Presse, 2012