Scania Increasing Production − Will Resume Five-Day Week in April

STOCKHOLM, Sweden--Regulatory News:

“There is a need to increase production mainly because demand remains very high in Brazil, but some recovery is also occurring in Europe. By efficiently utilising our global production structure, we are boosting our manufacturing rate in Europe so that we can supply South American production units with components”

Scania is increasing its production and is therefore making an exception from the current agreement on a four-day week during the first half of 2010 for workshop employees in Sweden. According to the agreement, white collar employees will resume a five-day week in April.

“There is a need to increase production mainly because demand remains very high in Brazil, but some recovery is also occurring in Europe. By efficiently utilising our global production structure, we are boosting our manufacturing rate in Europe so that we can supply South American production units with components,” says Anders Nielsen, Executive Vice President, Production and Logistics.

The resumption of the five-day week at production units applies primarily to April. Since it is mainly an increase in the rate of component manufacturing for South America that will require a five-day week, certain workshops in the European production network will continue to have Fridays off during the second quarter. This applies, for example, to final assembly of trucks in Södertälje and cab assembly in Oskarshamn, which account for nearly 2,000 of Scania’s workshop employees in Sweden.

“I am not, however, ruling out that additional production rate increases may lead to a resumption of the five-day week at these units as well, if the positive demand trend continues, though it should be noted that the level of demand is substantially lower than during the record-breaking years 2007 and 2008,” Mr Nielsen says.

Scania has applied a four-day week since June 2009 for all employees in Sweden. Various forms of working week reductions have also been in effect for more than 2,000 employees in the Netherlands, France, Germany and elsewhere.

Since late 2008 the number of employees in Scania’s production network has decreased by about 3,000, including 2,000 employees with fixed term temporary contracts that were not renewed. The remainder of the decrease has been due to a freeze on recruitment to replace retiring employees etc.

The introduction of the four-day week has been a key element of Scania’s strategy to preserve the collective competency of the company despite a very sharp decline in market demand. According to the current agreement in Sweden, which was signed in December 2009, the four-day week applies to white collar employees during the first quarter of 2010 and to workshop employees during the first half.

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.

Scania press releases are available at www.scania.com

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