Volvo Buses to close factory in Heilbronn

Volvo Buses is closing its coach factory in Heilbronn, Germany. The formal decision to close the factory was taken by the board of directors at Volvo Busse Industries (Deutschland) GmbH. The decision will affect around 150 people.

Volvo Buses manufactures one of its coach models, the Volvo 9900, at the Heilbronn factory, a unique low volume product. The financial result for the Volvo 9900 has been unsatisfactory for many years. Volvo Buses’ board decided in the spring to no longer accept losses at the Heilbronn factory. Volvo Buses has worked with different alternatives for Heilbronn’s future including trying to find a buyer for all, or part, of the business. The alternative of selling however has not been possible and therefore the decision has been taken to close the factory. This decision is in line with Volvo Buses’ long-term strategy for achieving profitability and continuing to upgrade the global coach range and concentrate manufacturing at the main factories. The coaches already planned for the factory will be completed and the management expects around 150 employees to leave in stages during the summer and autumn. Volvo Busse Industries (Deutschland) GmbH, has, together with the unions, negotiated various supporting measures for the employees. The costs related to the close down, around SEK 95 million, will be charged against income in Q2. The commercial organisation in Germany will not be affected by this decision. Volvo Buses will continue investing in the country and offer the full product range, including the new version of the Volvo 9700 coach. June 15, 2005 For further information, please contact, Per-Martin Johansson, Communications officer/Media relations, +46 31 322 52 00