Volvo Restructuring Truck Manufacturing in Europe
October 16, 2013
The plant in Umea will be further specialized in its main core business, including the painting of cabs.
The Volvo Group will restructure its truck-manufacturing activities in Europe over the next two years, improving efficiency and cutting its workforce.
The plan is to relocate cab trim operations in Sweden from Umea to Gothenburg, to concentrate the assembly of heavy-duty trucks in Gothenburg to one line, and to concentrate the assembly of medium-duty trucks to Blainville, France.
"Today's European industrial structure for truck manufacturing is partly the result of acquisitions, and we now intend to use the various plants in an optimal way", says Olof Persson, Volvo's President and CEO. "This will generate more efficient truck manufacturing operations, which will improve our potential to compete successfully in global markets."
Each plant will be more specialized and optimized for its respective area, improving efficiency and cutting the manufacturing cost per truck. Cutting manufacturing costs is one of the objectives in the company's new truck strategy for 2013 to 2015.
The assembly of medium-duty trucks will be concentrated in the plant in Blainville, France, as one assembly line is relocated from Ghent, Belgium (shown) to Blainville.
More details about the changes:
- Cab trim operations will be relocated from Umea to Gothenburg, and the plant in Umea will be further specialized in its main core business -- sheet-metal pressing, welding and painting of cabs.
- The assembly of heavy-duty trucks in Gothenburg will be concentrated to one line from the two lines of today. The change will free up space for better and more efficient manufacturing and logistics. The manufacturing capacity for heavy-duty trucks will be balanced with the plant in Ghent, Belgium, allowing the capacity of that plant to be better utilized.
- The assembly of medium-duty trucks will be concentrated to the plant in Blainville, as one assembly line is relocated from Ghent to Blainville. The relocation will contribute to improved logistics in Ghent while making medium-duty truck manufacturing more efficient. In Blainville, there is already a manufacturing line for medium-duty trucks, complete with cab manufacturing and cab trim operations for both Volvo and Renault Trucks. This change means that cabs manufactured in Blainville will no longer have to be transported to Ghent.
The directional decision includes staff cutbacks, as well as operational changes and will be subject to trade union consultations. The changes are intended to be made gradually over a period of two years and the number of affected employees depends on several factors, including future manufacturing volumes and the results of the coming trade union discussions. About 900 employees are currently working in the areas of the manufacturing operations that will be relocated.
The optimization of the European industrial structure for truck manufacturing is part of the previously communicated Group-wide efficiency program.
2011: Volvo Sets Goals to Increase Operating Margin
2011: Volvo Reorganizes Truck Operations
2011: Volvo exec sees truck maker well positioned to help fleets with major issues
2012: Volvo Drops UD, Plans to Cut R&D as Part of Strategic Trucks Changes
2012: Blog -- What do trucks and a yacht have in common?
2012: New Volvo Trucks Chief Plans to Take on Vocational Market