Volvo collaborates to lower personnel costsPosted on March 16th, 2009
Management and unions want to eliminate pink slips
By Nina Russin
Dateline Gothenburg: Volvo is one of many automakers struggling to maintain solvency in the current financial turndown. Rather than requesting outside assistance the automaker has decided to deal with the situation internally. Company execs and union members have agreed to a plan that includes postponing pay increases and taking leave without pay.
Postponing pay increases until January 2010 will account for half of the total savings. In addition, the company’s forty highest ranked managers, including the executive management team will take a five percent pay cut. The pay cut begins April 1, and is effective through December 31.
Work time compensation is reduced by 1.5 hours per week for all employees during the same time period. Managers and employees will not accept bonuses through 2010.
To adjust production costs for lower sales volume, employees will take up to 45 lay-off days this year: compensation for lay-off days is fifteen percent below normal.
“We are in an extreme situation with a continuing weak global market for new cars, especially in the US and Sweden,” said Volvo president and CEO, Steve Odell.
“We… need to take extraordinary measures to improve the competitiveness of our business,” Odell continued. “This agreement we all believe is a good model to secure our business and avoid further employee separations at the present time.”
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