“This was no easy decision, but it is a necessary one. Our volumes are decreasing, both in production and product development, while at the same time we need to manage our cost situation,” says Staffan Zackrisson, President of Volvo Aero.

The factor behind these notices is the profound economic downturn, which is becoming increasingly discernable in the aviation industry. On Monday, the International Air Transport Association (IATA) announced that it expects global airlines to lose USD 9 billion this year, nearly double the figures forecasted as recently as March 2009.

Volvo Aero has also observed that product-development requirements are declining as a result of reduced scope for investment.

Another key reason is that Volvo Aero’s expenses have recently risen more than the company’s sales have increased.

“This is why we must make cutbacks if we are to remain competitive,” said Staffan Zackrisson,  explaining the reasons behind the notices.

The first information regarding these notices as required under the Swedish Employment (co-determination in the workplace) Act has already been obtained. Statutory trade-union discussions regarding notices of termination of employment will begin immediately.

A total of 250 blue-collar employees were issued with notice of employment termination in January. It was announced in April that 220 of these employees would be laid off.

June 9, 2009

For more information, contact Fredrik Fryklund, Vice President, Corporate Communications at
Volvo Aero, tel: +46 520 94401 or +46 703 19 2396.