Wednesday, June 25, 2008

Volvo cutting its losses

Volvo's recent announcement that it will be sacking 1200 employees in Sweden and that it will be dropping an additional 300 jobs overseas, along with 500 contractor cancellations, has reignited talks of the company moving towards a potential sale.

Volvo is the last of the original Premier Automotive Group left in Ford Motors, after it sold Aston Martin, Land Rover and Jaguar. It denies that it is going to move to the sale of Volvo, and claims that these layoffs are part of its multimillion pound cost cutback. Ford sold the aforementioned companies to Indian automotive conglomerate Tata in order to focus on its declining sales in the US market.

We saw that this slump in sales in the US has affected other companies as well, such as Toyota, whose sales of trucks and lorries has dropped so sharply that they are having to focus more on their fuel efficient smaller vehicles, a trend that is very unlike anything the American market has been like historically.


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