VOLVO AERO ISSUES PRELIMINARY LAY-OFF NOTICE

The corporate management of Volvo Aero has today decided to submit
preliminary notice of redundancy measures affecting 250 employees in
Trollhattan to the County Labor Board. Of the employees affected, 150
are active within VA (blue-collar) and 100 within TA (white-collar).

The background to this notification is the ongoing decline in the
international aviation industry, which is forcing Volvo Aero - and other
companies in the industry - to continue to adjust to the prevailing
conditions.

Combined with new workload figures for the workshops during the period
2004-2005, the weakening of the company's finances has resulted in the
decision that the company will reduce the number of employees.

Stage 1 Codetermination negotiations with the unions are being started
immediately. Work to determine which employees will be affected will
start as soon as the first Codetermination negotiations have been
concluded. The periods of notice will vary, depending on length of
employment but no one will be required to leave the company before
November 20, 2003.

Volvo Aero has reported losses during the past three quarters (totaling
SEK 119 M) and there are currently no signs of any turnaround in the
aviation industry. Instead, many factors indicate that no improvement on
the components side can be expected until 2006.

"Accordingly, we have no other choice than adapting our capacity to the
very weak demand," comments Volvo Aero President Fred Bodin.

It should be noted that the redundancy notice is not connected in any
way with the discussions about a possible closure of the company's space
operations.

May 19, 2003

For additional information, please contact Fredrik Fryklund, Head of
Corporate Communications, +46 703 19 23 96.