Press releases 2009

At Volvo’s Capital Market Day in Eskilstuna, Sweden, on Tuesday, the Volvo Group CEO, Leif Johansson, announced that the Group had developed its own medium-heavy engine for trucks and buses scheduled for launch in 2010. Leif Johansson also said that the focus of the next few years will be on internal efficiency. Furthermore, he stated that the sales trend in trucks has continued to weaken in the second quarter, something that can also be discerned from the truck delivery figures presented by the Group in the spring. Since the Group is endeavoring to reduce its inventory of new products, capacity utilization in manufacturing is generally at very low levels in the plants.

The total deliveries from the Volvo Group’s truck operations in May amounted to 9,446 vehicles. This was a decrease of 57%, compared with the year-earlier period. Compared with April this year, deliveries increased by 3% in May.

Volvo Powertrain has signed an agreement with the local PTK trade unions in Skövde, Sweden regarding the shortening of work hours with subsequent income reduction. The agreement results in the cancellation of the layoff notices to 30 salaried employees issued on April 22 this year.

The management and the local union have come to an agreement to deal with the low utilization at the assembly plant in Gothenburg. The agreement includes reduced working time and salary which has made it possible to avoid the previously announced reduction of 335 jobs in Gothenburg.

The Swedish government has decided to continue to participate in the European launch-vehicle program. This means that Volvo Aero’s space operations in Trollhättan can continue to participate in all ongoing Ariane, and technology programs.

Members of the U.S. trade union, the United Auto Workers, have approved the new 40-month Master Agreement with the Volvo Group’s subsidiary Mack Trucks. The agreement includes the establishment of an independent trust that will completely eliminate Mack’s commitments for providing healthcare to retired employees. As previously announced, this will have a negative impact of approximately USD 110 M on the Volvo Group’s operating income during the second quarter of 2009 and a negative impact of the same amount on net debt.

The Volvo Group’s unit for engine and gearbox production, Volvo Powertrain, has signed an agreement with the local IF Metall trade unions in Skövde and Köping, Sweden regarding the shortening of work hours with subsequent income reduction. The agreement results in the cancellation of the layoff notices to 600 employees in Skövde and Köping issued on April 22.

During an event yesterday, the Volvo Group’s Mack Trucks subsidiary was recognized for delivering the first parallel-hybrid truck in the U.S. designed specifically for heavy-duty applications. The vehicle is a refuse collection truck that will be tested by the City of New York’s Department of Sanitation. As a result of the hybrid operation, in which an electric motor and a diesel engine work in parallel, fuel consumption can be reduced by up to 30% and carbon emissions decreased to the same extent. The vehicle also fulfils the stringent EPA10 emissions standards that become effective in 2010, which reduce hazardous emissions to near-zero.

WirelessCar has been selected to be the Telematics Service Provider for BMW in Europe. This prestigious contract will ultimately connect all newly produced vehicles on these markets from June 2010 and forward and also include a migration path for all legacy vehicles currently operating in the marketplace.

A group of employees from the Volvo Group in Göteborg, Sweden, have been taking part in a project in which a personal CO2 “pedometer” has kept a check on what their commuting to work costs in the form of carbon emissions. Their journeys were registered using software in their mobile phones and a concept developed by Volvo IT. By changing their behaviour, the group succeeded in reducing their carbon footprint by more than 30%.