Volvo to stop output at Swedish and U.S. factories

[Mark-x]

Volvo will temporarily stop production at its three plants in Sweden and its U.S. factory.

All four plants will be closed from March 26 until April 14 as Volvo joins other automakers and suppliers in stopping production to help slow the spread of the coronavirus, the company said Friday.

Volvo's assembly plant in Torslanda, near Gothenburg, makes the XC90 and XC60 SUVs and the V90 station wagon. Volvo builds its four-cylinder gasoline and diesel engines in Skovde, while it produces body components in Olofstrom.

The S60 sedan is produced at the automaker's factory in Ridgeville, near Charleston, South Carolina.

On Tuesday, Volvo stopped production at its plant in Ghent, Belgium, where it makes the XC40 SUV and V60 station wagon.

Production at Ghent is scheduled to resume on April 6, Volvo said.

Earlier this month Volvo reopened its four manufacturing plants in China after an extended closure period caused by the coronavirus outbreak.

"Today's showroom traffic is indicating a return to normal in China’s car market, which is clearly demonstrating the advantages of being a globally balanced company," Volvo said.

Volvo makes the vehicles in Chengdu, Luqiao and Daqing and builds engines in Zhangjiakou.

Along with the plant shutdowns, people working at the company's European and U.S. offices will primarily work from home starting March 26 and working hours will be reduced.

Volvo hopes the multiple actions it is taking "will protect jobs and ensure the automaker's operation can return to normal as soon as it is possible and safe," the company said.

In the U.S., plant workers will receive 80 percent of their salaries, with 44 percent coming from Volvo and 36 percent from the state government, a Volvo spokeswoman told Automotive News Europe.

In Sweden, 94 percent of plant workers' salaries will be paid by the company with support from the government. The same pay scheme is in place for non-factory workers, however many of them will still be working 60 percent of their regular hours.

The terms of payment for workers at Volvo's facility in Ghent are still being negotiated, the spokeswoman said. 

Added Volvo CEO Hakan Samuelsson: “Our primary concerns are the health of our employees and the future of our business. With the help of valuable supporting programs put in place by governments and authorities, we have been able to act quickly.”