Negotiations on Redundancies Finalised at Volvo Car Corporation

GOTHENBURG, Sweden - December 9, 2008: Negotiations between Volvo Car Corporation and its union representatives have now been completed. 2,721 employees in Sweden will leave the company, where of 2,367 blue collar workers and 354 white collars. An additional 680 employees abroad will leave the company. Also, 1,215 contracts with consultants have been terminated.

All employees have been, or will be informed during the coming week. As part of the notice process, each affected employee will be given an information package including invitations to meetings with Trygghetsrådet, Startkraft and the Swedish Public Employment Service. The majority of the redundant employees will have been released from work by December 31st 2008, however with full salary during the notice period.

During the autumn, a matching process has taken place, where approximately 1,000 people have been matched into new jobs where positions have become available in connection with reorganisation and termination of contracts with consultants.

In parallel with the reorganisation, Volvo Car Corporation has carried out an efficiency program in all parts of the business. These savings have been found in areas such as renegotiations of contracts, reducing purchased services, savings in IT, telephony, travel and new routines in the procurement process. Further savings will be achieved by co-locating certain departments and units during 2009.

"Today is of course a very sad day at Volvo, but I feel satisfied with the fact that our cost reduction program has been successful and it has enabled us to stay with a lower number of redundancies", says Stephen Odell, President and CEO of Volvo Car Corporation.