Once promoted as a ‘very Swedish’ company, Volvo is today dividing loyalties with it’s Chinese partner, SDLG, “to aid profitiability” says the company. They are doing this at a time when other manufacturers are bringing off-shore production back to Europe or the USA, because of narrowing production cost differentials.
The company says that this transfer is to ‘improve profitability and reduce costs’. The company goes on to say that Volvo Construction Equipment will discontinue development and production of its current product line of Volvo-branded backhoe loaders and motor graders.
This will result in a workforce reduction of about 1,000 employees, of whom the majority are in Poland, the US and Brazil.
Currently, motor graders are built at production sites in Shippensburg, US, and Pederneiras, Brazil, while backhoe loaders are manufactured in Pederneiras, Brazil, and Wroclaw, Poland. Ceasing European production of backhoe loaders will result in the closure of Volvo CE’s operations in Wroclaw.