Proving just how global the economy really has become, Ford-owned Volvo just announced it will slash around 2,000 blue-collar jobs and 700 white-collar jobs in Sweden. Additionally, claims Carscoop
, another 600 jobs and 700 consulting contracts outside of Sweden will be terminated. In all, including previous cuts from the Swedish automaker, some 6,000 jobs will be eliminated from Volvo's 25,000 global employee base.
Volvo places blame squarely on "the rapidly deteriorating market situation in the global car industry," and with even mighty Toyota offering 0 percent financing on 11 models, it's clearly a tough time for everyone concerned. But a recent article by Automobile Magazine's Jamie Kitman
points out some troubling Ford-inspired changes at Volvo that should be quickly abandoned before things get even worse.
Volvo CEO of U.S. operations, Anne Beléc, not only announced dealer closings and staff cuts for Volvo in 2008, she also announced the Swedish automaker's future direction for the North American market in hopes of turning the slipping sales story upside-down. That direction, "the centerpiece of Beléc's bold campaign to restore the company to health," according to Jamie Kitman, centers around Volvo shifting its focus from its small cars (C30
) to its large cars and SUVs (S80
, and new XC60
) that offer higher profit margins. With such a strategy in the face of tanking truck and SUV sales, could it be any more obvious that Beléc was previously general manager of marketing at Lincoln Mercury?
Yes, Americans love the SUV, as well as large V-8 luxury cars. But that love affair is coming to a bitter end, and we hope that Volvo will focus on vehicles like its ultra-efficient dRIVE trio
as Americans learn to trim the fat. To invest in SUVs and large cars as the market shifts the other way seems almost like a death wish in the current environment.--Colin Mathews