Declining demand for trucks has forced the production arm of Volvo Commercial Vehicles Australia (VCVA), maker of Volvo Trucks and
Declining demand for trucks has forced the production arm of Volvo Commercial Vehicles Australia (VCVA), maker of Volvo Trucks and Mack Trucks, to lay off around 90 permanent and 40 contract employees at its Brisbane production plant.
The company says it is taking measures to downsize capacity and cut costs in its Australian production system to meet the declining demand for trucks.
“In recent years VCVA has gradually increased capacity in response to the growing demand for Volvo and Mack trucks. In recent months, however, truck demand has slowed,” the company says in a prepared statement.
“This development has been accentuated by recent events in global financial markets which have resulted in financial and economic uncertainty.”
Mona Edström Frohm, General Manager of Volvo Truck Production at the Wacol factory, says the planned reductions have to be undertaken to re-balance capacity and to meet reduced customer demand.
He describes it as a very difficult time for everyone in the organisation.
“We are providing professional advice for the staff being made redundant. This extends to outplacement, financial planning and personal counseling,” Mona says.
Peter Hertinge, President and CEO of VCVA, says VCVA cannot escape the reality of the global economic downturn.
“Volvo, like many other companies world-wide, has to adapt responsibly to changing market conditions,” he says.
“A cost-saving program has been introduced throughout the entire organisation to improve efficiency in all commercial operations.
“This will strengthen our financial position and ensure that we emerge from these temporary economic challenges as strongly as possible.”