Volvo Powertrain, which manufactures diesel engines, has given redundancy notice to 900 employees at three units in Sweden: Skovde, Koping and Gothenburg. This is as a result of decresing customer demand. 700 of the employees are blue-collar workers and 200 are white-collars. Production volume is to be readjusted to meet market demand. Negotiations with the trade unions were initiated on the 11th November and will be ongoing for six months before any measures can be taken. However, the employees affected by the redundancy notice have to be informed by 31 March 2009 at the latest.
Volvo Powertrain is the world’s largest producer of heavy diesel engines in the 9-18 litre classes. The business unit coordinates Volvo Powertrain's operations and supplies the Volvo Group’s business areas with integrated powertrain systems comprising diesel engines, transmissions and driveshafts. Volvo Powertrain has about 6,300 employees with the majority of them working in production and the rest in product development and administration.
The Swedish authorities applied to the European Globalisation Adjustment Fund (EGF) for aid.