Another 450 jobs to go in Irvine closure
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• by Colin Banat Volvo's Truck and Bus assembly plant at Irvine in Ayrshire will close within 15 months with the loss of 450 jobs. The announcement came on the same morning that news broke of Ford's purchase of Volvo's car division. 250 job losses had already been announced following the decision to move bus production to Sweden and Poland, but the latest move means that all 450 jobs will go when the plant closes completely by July 2000.
Volvo blames the closure on an increasingly competitive market, combined with surplus manufacturing capacity generated by improved productivity. Irvine's truck production will move to plants in Sweden and Belgium. The Amalgamated Engineering and Electrical Union has launched a campaign to fight the decision.
Scottish regional secretary, Danny Carrigan says: "Irvine has a flexible workforce, ready to adapt to more efficient production techniques if needed, and has lower labour costs than Sweden or Belgium. The union will commission an acade
mic study to prove the plant's viability."
Ford's acquisition of Volvo's car division ends weeks of rumour-mongering, fuelled by heavy hints from the Detroit giant that the number of independent motor manufacturers in the world was about to reduce by one. The 14bn takeover fulfils Ford's need for a "middle-class" product to fill the gap between its own range and Jaguar, and solves Volvo's problem of being too small to fund future development efficiently.
The deal gives Ford the perpetual rights to the Volvo brand for cars and, intriguingly, "light trucks". This phrase comes from Ford in the US, and may refer to pickups. Volvo will retain a high degree of autonomy, something which is felt to be essential to maintain the marque's hard-won reputation. Ford beat off Fiat in the final stages, the Italian group only wanting to do a deal that included the truck business.
The sale of the car brand has further increased speculation that Volvo is serious about its desire to take over Scania, although Paccar, MAN and Navistar have also been named as targets. It certainly has the cash floating around. Volvo's price for its initial Scania stake places a value of just £2.7bn on the remaining 97.15%.
Scania's major shareholder is the Wallenberg family's Investor concern: one of its biggest objections was that Volvo's purchase undervalued Scania—Volvo may now be in a position to make offers that cannot be refused.