Car manufacturer to cut 1,300 jobs in challenging times

Climate change: Ursula von der Leyen pledges EU ‘green deal’

Volvo Cars has announced it is going to cut 1,300 white-collar positions in Sweden to cut costs, a move blamed on the EU Commission’s Green Deal plans

The CEO of the Chinese-owned car giant, Jim Rowan, said in a statement: “Economic headwinds, increased raw material prices and increased competition are likely to remain a challenge to our industry for some time.”

In an interview with Reuters, Rowan added the company is “still working the details” of how much the move would make them save financially.

He added: “We sell in over 80 countries or so worldwide, so I think there’s opportunities for us to become more efficient across the entire network.”

The move was blamed on Ursula von der Leyen and her Vice-President Frans Timmermans by Italian MEP Marco Zanni, who argued Brussels’ green proposals are driving investments and companies away from the bloc.

He blasted: “Yet another producer cutting jobs in the EU, this time 1,300 in Sweden. These are only the first consequences of the European Green Deal designed by Von der Leyen and Timmermans.”

Earlier this year, American car giant announced it would cut 3,200 jobs in Europe, mostly in Germany, to move activities back to the United States.

According to the German union IG Metall, 65 percent of European research and development centres and 20 percent of administrative workers were at risk.

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A total of 15,000 people work at the Cologne site.

“The company intends to carry out its main development-related activities in North America”, in a context of “transition from the internal combustion engine to the electric motor”, added the union. At the Aachen site (on the border between Belgium and the Netherlands), where Ford has a research centre, “220 employees have to fear for their jobs,” according to IG Metall.

The reorganisation followed the European plans to ban internal combustion engines, diesel and petrol, starting from 2035.

Furthermore, the rising cost of materials for electric vehicle batteries and the expected slowdown of the economies of the United States and Europe are pushing automakers to cut spending.

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Also increasing the pressure, analysts explain, is the price war for electric cars launched by Tesla at the beginning of the month.

Ford’s move was probably also influenced by Joe Biden’s law on subsidies to green manufacturing – the Inflation Reduction Act, which provides tax credits of up to $7500 just for electric vehicles assembled in North America and containing batteries manufactured in the region.

Cars produced in Europe will not be able to access the bonuses, losing on price competitiveness.

The legislation has been at the heart of an ongoing trade dispute between the Biden administration and the Brussels bloc.

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