Ford Motor Corporation (NYSE: F) will see its Volvo Car division shed 3,300 jobs as the American automaker continues dealing with a huge slowdown in sales in the U.S. as well as other global markets. The auto industry is not in a death spiral at the moment (although it's been described that way), but expect the largest restructuring of one of the largest industries ever in the last 50 years. Ford will help lead the way, unfortunately.Volvo announced that 2,700 of the positions will be eliminated in its home country of Sweden while 700 additional positions will be cut globally. The company said in a statement this week that "to meet the rapidly deteriorating market situation in the global car industry, the management team at Volvo Car Corporation has decided to initiate further structural changes in all parts of the business." That is light language for "the sky is falling."
The Swedish company will also get rid of contracts with 700 consultants. As it makes these cuts, they can't be the last, I'd expect more announcements in 2009 from Volvo as well. Consumers continue flocking to vehicles with smaller prices, smaller engines and larger MPG figures. Volvo, which makes great cars, just doesn't have the product mix to fit that description. That is the price for inflexibility not only in the U.S. market, but for all global consumer markets that are under extreme duress at the moment. Everyone hopes it gets better soon, but your guess is as good as mine.
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Reader Comments (Page 1 of 1)
10-09-2008 @ 5:11PM
robyone said...
How do the investors expect the economy to pick up
if any time somebody sneezes they sell.
My advisor tells me to hang on. Hang on to wat ..
I am getting "raped" on a daily basis but hanging on,what
abaut them the // investors// wy can the hang on.