GOTHENBURG, Sweden, March 16,
2023 /PRNewswire/ -- Volvo Buses is changing
its business model in Europe and
will apply the same successful model as it has on several other
markets. This means that Volvo Buses will focus its production on
chassis and together with external bodybuilders offer customers in
Europe a complete range of city
and intercity buses as well as coaches for the premium segment.
Consequently, Volvo Buses has decided to close its bodybuilding
factory in Wroclaw, Poland, during
the first quarter of 2024. Volvo Buses has signed a Letter of
Intent regarding the divestment of its premises to Vargas Holding.
A restructuring provision of SEK 1.3
billion will negatively impact operating income in the first
quarter of 2023.
"Our business in Europe has
been loss-making for years. With this business model, that we
already today apply successfully in many markets, we will improve
profitability and secure our long-term competitiveness," says
Anna Westerberg, President of Volvo
Buses.
Moving forward, Volvo Buses will continue to have the customer
interface, offer customers in Europe a complete range of buses and coaches
in partnership with selected external bodybuilders, while securing
a strong uptime service and a high standard of safety and quality.
This will give Volvo Buses a leaner structure, improved
flexibility, and the ability to better meet market requirements and
customer demands.
The bodybuilding manufacturing in Wroclaw is planned to continue
until the first quarter of 2024. Orders placed for complete buses
and coaches in Europe will be
delivered from the Wroclaw plant according to plan. Volvo Buses
will continue to give full service and support to the existing
fleet as well as to the new offering.
New opportunities for Volvo Buses employees
After discussions between Volvo Buses and Vargas Holding, a Letter
of Intent (LoI) has been signed according to which Volvo Buses'
premises in Wroclaw will be divested to Vargas Holding. Vargas
Holding will re-purpose and gradually grow the production facility.
The production will start in 2024 and expand in the years to
follow. The Lol includes Vargas Holding's aim to offer employment
to parts of the Volvo employees, some as early as the third quarter
of 2023.
"Although Vargas Holding will operate in a different industry to
ours, a key factor for them is the possibility to employ the
experienced staff working in our organization in Wroclaw needed for
their establishment and future expansion," says Anna Westerberg.
The decision to end the production of complete buses and coaches
will impact approximately 1,600 positions at Volvo Buses, whereof
around 1,500 are based in Wroclaw. Information and dialogue with
respective unions have been initiated.
"Volvo Buses will do the utmost to support our loyal employees,
many of whom have been employed for numerous years. We will work
together with Vargas Holding, local authorities and other parties
to support people in finding new employment opportunities,"
says Anna Westerberg.
Volvo Group will continue to have a strong foothold in
Poland also after the factory
closure with more than 2,100 employees working at Volvo Trucks,
Volvo Construction Equipment and Group support functions such as
digital and IT, real estate, people services and accounting
services.
Volvo Buses' factories in Sweden and Brazil producing chassis and the manufacturing
of complete buses and coaches in Mexico and North
America are not affected by the decision and will continue
with production as normal.
Volvo Buses' factories in Sweden and Brazil producing chassis and the manufacturing
of complete buses and coaches in Mexico and North
America are not affected by the decision and will continue
with production as normal.
Implementation of the new business model is expected to
negatively impact revenues in Europe temporarily during the transition
period in 2024 and 2025. A restructuring provision of approximately
SEK 1.3 billion will negatively
impact operating income in the first quarter of 2023. The expected
negative cash flow effect is estimated to approximately
SEK 1.0 billion, of which the
majority will impact 2024. Once completed, the move to the new
business model is expected to make the European bus operation
profitable.
For more information, contact: Joakim Kenndal, Head of
Media Relations, Volvo Buses, phone: +46 739 02 51 50 or
email: joakim.kenndal@volvo.com
Volvo Buses is one of the world's leading providers
of sustainable people transport solutions. The offer includes
premium city and intercity buses, coaches, and bus chassis as well
as services for increased productivity, uptime and safety. Volvo
Buses has sales in 85 countries and a global service network of
more than 1,500 dealerships and workshops. Volvo Buses is part of
Volvo Group, one of the world's leading manufacturers of trucks,
buses and construction equipment as well as drive systems for
marine and industrial applications. Volvo Group also provides
complete financing solutions. For more information visit
http://www.volvobuses.com
The following files are available for download:
https://mb.cision.com/Main/39/3735134/1920968.pdf
|
230316-buses-changes-business-model-in-europe-en
|
https://news.cision.com/ab-volvo/i/1860x1050-news-common-volvo-sign,c3156598
|
1860x1050-news-common-volvo-sign
|
View original
content:https://www.prnewswire.com/news-releases/volvo-buses-changes-business-model-in-europe-and-has-decided-to-close-its-bodybuilding-factory-in-wroclaw-in-2024-301774092.html
SOURCE AB Volvo