Volvo will eliminate 500 jobs in Ontario and 1400 in Europe

Volvo has announced the elimination of about 1,900 jobs Tuesday, including about 500 in Ontario, as part of measures designed to improve its profitability and help you become more competitive.

1,400 lost jobs are piecing plants of the division of Volvo trucks in Ghent, Belgium, and Gothenburg and Umea, Sweden.

Volvo said in a press release Tuesday that these job losses are a consequence of its decision to reduce the capacity of its production in Europe in order to adjust to the waning demand for trucks in the European market.

In recent years, Volvo has gradually increased its capacity to meet growing demand, but given the demand became weaker, the company has decided to reduce its production capacity to more normal levels. Volvo argues that the decline of the market has been exacerbated by the recent events that have affected the financial markets, explaining that customers have become more conservative when it comes to replacing their vehicles and some arrived even longer get loans to finance the purchase of new trucks.

In Ontario, the employees affected by the measures adopted by Volvo are in the employment of the division of construction equipment group (Volvo Construction Equipment, Volvo CE). Volvo has decided to transfer its production graders Goderich, Ontario has its factory in Shippensburg, in the U.S. state of Pennsylvania. The measure, which will be effected in different phases should be completed by 2010. It will cost about us $ 45 million which will be paid in the third quarter of 2008.

Volvo sold its car division to produce a Ford Motor in 1999.