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TRUCKMAKERS NEWS * Sweden - Volvo and Scania Try to Be Better Prepare for Slowdown
Positioned for Another Possible Recession
(Photo Associated Press: A welder on the Volvo truck assembly line in Dublin, Va.,USA)
Stockholm,Sweden -The WSJ, by Sven Grundberg, Jens Hansegard & Niclas Rolander -August 30, 2011: -- Swedish truck makers Volvo AB and Scania AB are bracing for the possibility of another economic recession, and this time they expect to be better prepared than three years ago... The two companies are hiring more temporary workers so that they have more flexibility to adjust labor costs to meet demand... The companies also have reduced their debts, especially their exposure to short-term funding, and they have lowered their inventory levels so they aren't burdened with products they can't ship if sales fall... Truck makers were hit particularly hard by the last recession. Demand for new trucks disappeared quickly as prospective customers scrapped plans for purchases as they reined in capital expenditures amid an uncertain economic outlook. Orders were slow to pick up when economic recovery arrived... Among Sweden's industrial companies, Volvo and Scania are especially vulnerable to Europe's economic frailty because their products are big-ticket purchases that often can be delayed in tough times... Swedbank said also that fixed cost bases at Volvo and Scania haven't been rebuilt since the crisis in 2008 and added that inventory levels—a key problem during the last crisis—are lower now, which "indicates that one should assume less challenges to adjust production levels than in the sharp downturn [in 2008 and 2009]" ...Labels: truckmakers news e
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