Volvo, the Sweden-based car maker owned by Ford, is to lay off 3,300 people in addition to cuts it announced earlier this year. It said the move is in response to falling sales and surging raw material costs.
Volvo Chief executive Stephen Odell said: “I think that you’ve seen is effectively a credit crunch impact that’s flowed across the world pretty rapidly. Dealers, even profitable dealers, are obviously finding it difficult to find financing to buy products. And people who are in good jobs, good employment, are finding it difficult to get funding to be able to buy cars.”
Of the latest cuts, 2,700 will be in Sweden and 600 in the rest of the world. It brought the total number of layoffs by Volvo this year to 6,000. The German carmaker BMW said reduced sales are forcing it to stop production at its Leipzig plant for four days later this month.
Worker Ingo Maik tried to look on the bright side saying: “We can all see how thing are right now. That BMW is closing for a week, ok, that’s better than laying people off. We don’t know what’s going to happen in the future, but we remain worried.”
BMW announced its worldwide sales fell nearly 15%in September with North America particularly weak. As a result it will send about 20,000 vehicles originally intended for the US market to Russia or China instead.