Volvo Ghent can “rest easy”, say managers

Summary

Speculation has increased about the future of the Volvo factory in Ghent after the Swedish car manufacturer announced a new production facility in China

New plant in China

According to reports out of Sweden last week, Volvo’s trucks division could be on the verge of cutting 3,000 jobs worldwide, including at the factory in Ghent. The company, however, has described the media reports as “pure speculation”.

The Swedish car manufacturer announced last month that it was extending an existing cost-cutting programme, with a view to saving €380 million by the end of next year, with cuts in IT, heavy machinery and the sales force.

It then announced last week that it would start production of the Volvo XC60 in a factory in Chengdu, China. Because the XC60 (pictured) represents 45% of all production at the Ghent plant, speculations emerged about the future of the facility.

“I understand the concern, certainly in the light of what has happened in car production in Belgium in the last 10 years,” Alain Visser, a Flemish manager at the Volvo headquarters in Göteborg, told Trends magazine. “But even in the best divisions of the group, we continually have to improve. Just because things are going well, you can't just leave well alone and concentrate elsewhere. That applies also to Ghent.”

However, continued Visser, the  company is one of the few in the industry not to suffer from overcapacity, and in fact planned to expand capacity, with a view to producing 800,000 cars a year by 2020 – up from 430,000 last year.

“So we need our factories, particularly in Sweden and Belgium,” Visser said. “The future of the Ghent factory is not up for discussion. I’m happy to repeat that. The Belgians can rest easy.”

Photo courtesy Volvo Group

Speculation has increased about the future of the Volvo factory in Ghent after the Swedish car manufacturer announced a new production facility in China.

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Volvo Ghent

The Ghent assembling unit of the Swedish car and truck manufacturer Volvo is the largest automobile plant in Belgium. A new Volvo factory in China, removal of production lines and a lack of innovation investments have recently cast a dark cloud over the plant’s future.
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