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UPDATE 1-Volvo cancels some redundancies, cuts Aero staff

Published 06/09/2009, 09:32 AM
Updated 06/09/2009, 09:40 AM

* Truck unit withdraws 335 redundancy notices

* Aero unit gives notice to 160 employees

(Adds redundancy notices at Volvo Aero)

STOCKHOLM, June 9 (Reuters) - Volvo said on Tuesday its truck unit had withdrawn redundancy notices previously handed out to 335 employees after a union deal, but its Aero motor unit was cutting 160 staff.

The world number two truck maker said in a statement the Aero layoffs in Trollhattan, southwest Sweden came as a result of a profound economic downturn.

"Our volumes are decreasing, both in production and product development, while at the same time we need to manage our cost situation," it said.

Volvo said earlier on Tuesday its truck operation had withdrawn redundancy notices at its Tuve plant, on the west coast of Sweden.

The company said it had struck a deal with the IF Metal union to cut working hours by 10 percent on top of two stoppage days per month already agreed, allowing it to scale back planned job cuts. Gross wages will fall as much as 4 percent, it said.

An agreed pay hike would also be postponed to March 31 next year while the company pledged not to cut any further jobs in the interim period. (Editing by Hans Peters)

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