Volvo Car Corp. Triples Job Cuts

Volvo Car Corp., a subsidiary of Ford, tripled the size of job cuts in its current reorganization, to a total of 6,000 employees and contractors worldwide, up from 2,000 positions previously announced in June.

"These are difficult times for the car industry in general, including Volvo. These actions are necessary to create a new and sustainable Volvo Car Corp. -- a company with more focused operations and structure," said Stephen Odell, president and CEO of Volvo Car Corp., in a written statement on Oct. 8.

"The unstable economic environment has resulted in a very unpredictable situation, and the downturn in the global car industry is more drastic than expected," Odell said.

Volvo has a total of about 24,300 employees. Of the 6,000 positions to be cut, 4,800 are Volvo employees per se, or about 20 percent of the total work force, not counting contractors.

Doug Speck, president of Volvo Cars of North America, said in a phone interview on Oct. 8 he can't say for sure exactly what effect the latest cutbacks will have on the U.S. organization, only that there will likely be some effect.

In September, Volvo's U.S. sales fell 51.9 percent to only 4,054 cars and trucks. Year to date, Volvo was down 25.9 percent to 60,028, according to AutoData.

Without providing any market-specific detail, the parent company in Sweden said that outside Sweden, it expects to cut 600 staff and 700 contractors worldwide.

Volvo Cars of North America has 265 salaried employees in the United States, including about 175 in and around U.S. headquarters in Rockleigh, N.J.; plus about 120 mostly blue-collar workers in parts distribution centers in New Jersey, Georgia and California.

Speck said that the U.S. subsidiary's move from Ford's former Premier Automotive Group headquarters in Irvine, Calif. to Volvo's former headquarters in Rockleigh will go ahead as scheduled, with a December 2008 target for completion.

Volvo moved its U.S. headquarters to California in 2001, but kept its customer care and parts and service operations in New Jersey. Volvo decided to move back east, after Ford sold the other Premier Automotive Group brands, Aston Martin, Land Rover and Jaguar.

Volvo Car Corp. should not be confused with heavy truck maker AB Volvo, which split off from the car company when Ford bought the passenger-car business in 1999.