Scania to Rehire in Its European Production Network

STOCKHOLM - May 7, 2010: Scania expects to rehire about 500 employees at its European production units.

"In response to the continued recovery in global demand, we need to increase our workforce in order to handle a higher production rate during the third quarter," says Anders Nielsen, Executive Vice President and Head of Production and Logistics.

The number of rehirings in the production network until June 30 will be equivalent to one fourth of the fixed term temporary employees whose contracts were not renewed due to the sharp downturn that followed the 2008 financial crisis.

"We used the period of low production capacity utilisation to take steps to improve our methods and ways of working. The improvements that our employees have developed will result in a significant improvement of productivity," says Mr Nielsen.

Since late 2008, the number of employees in Scania's production network has decreased by about 3,000, including 2,000 fixed term temporary employees whose contracts were not renewed. The rest of the decrease was due to a freeze on replacement recruitment resulting from retirements etc.

"The production increase that we are planning cannot be handled within the framework of the part of our flexibility agreement that allows weekly working time to be increased by five hours. Out of respect for our employees, increased overtime is not a good solution either. This is why we are also choosing to take advantage of the option in the flexibility agreement to hire up to 20 percent of production employees on fixed term temporary contracts," Mr Nielsen says.

The need for rehiring is greatest at Scania's component workshops located in Sweden, which will continue to provide certain back-up deliveries of engine, axle and gearbox parts to production units in Brazil. About 300 of the 500 jobs are in Sweden, and the others at final assembly plants for Scania trucks in the Netherlands and France.

The fixed term temporary employees whose contracts were not renewed in late 2008 and in 2009 have priority in Scania's recruitment. To date, about a hundred of these employees have been rehired by component workshops in Södertälje, Sweden. A vast majority of those who were offered jobs have agreed to be rehired. They will be employed on fixed term temporary contracts that run for six months and can be extended by another six months and then converted to permanent employment.

"It is encouraging that so many people are showing continued confidence in Scania as an employer. At the same time, it is a major advantage to be able to recruit employees with previous experience of Scania's working methods," Nielsen concludes.

Scania is one of the world's leading manufacturers of trucks and buses for heavy transport applications, and of industrial and marine engines. A growing proportion of the company's operations consists of products and services in the financial and service sectors, assuring Scania customers of cost-effective transport solutions and maximum uptime. Employing 32,000 people, Scania operates in about 100 countries. Research and development activities are concentrated in Sweden, while production takes place in Europe and South America, with facilities for global interchange of both components and complete vehicles. In 2009, invoiced sales totalled SEK 62 billion and net income amounted to SEK 1.1 billion.