Volvo Powertrain Signs Agreement on Shortening of Work Hours

STOCKHOLM, Sweden--(Business Wire)--
Regulatory News:

Volvo (STO:VOLVA) (STO:VOLVB) Powertrain signed an agreement today, May 18, with
the salaried employee organizations in Köping, Sweden, regarding the shortening
of work hours with income reduction. The agreement means that the layoff notice
for 25 salaried employees is being withdrawn. In addition, Volvo Powertrain has
reached a preliminary agreement with the IF Metall trade union in Skövde and
Köping on shortening of work hours with income reduction. A final agreement
would result in cancellation of layoff notices issued on April 22 involving 600
persons.

The agreement with the salaried employees unions in Köping applies from June 1,
2009 through March 30, 2010. Work hours will be reduced by 20%, salaries reduced
by a maximum of 10% during the agreement period and this year`s salary scale
revisions will be converted to time that is used for establishing stop days. The
company also guarantees that no new layoff notices will be issued during the
agreement period.

The agreement covers 180 salaried employees in Köping. The management group for
Volvo Powertrain in Köping is also included in the agreement.

The management group within Volvo Powertrain in Skövde and the Swedish division
management will also comply with the intention in the agreement.

It is Volvo Powertrain`s ambition to also reach an agreement regarding a
shortening of work hours with other salaried employees within the company`s
Swedish division.

The company has also reached a preliminary understanding with the local IF
Metall unions in Skövde and Köping regarding a shortening of work hours with
income reduction. If the understanding results in an agreement, the layoff
notices issued on April 22 will be withdrawn in entirety. The layoff notices
involved 350 collective-agreement employees in Skövde and 250 in Köping. IF
Metall`s members will vote on the agreement next week.

The preliminary agreement involves 2,450 employees in Skövde and Köping.

"It is important and favorable for Volvo that we reached our first agreement
regarding a shortening of work hours," says Peter Karlsten, President of Volvo
Powertrain. "With a reduction in work hours, we can sustain operations at an
adjusted cost level, retain expertise in the company and increase the pace of
production more rapidly when the turnaround occurs."

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AB Volvo (publ) may be required to disclose the information provided herein
pursuant to the Securities Markets Act. The information was submitted for
publication at 17.45 p.m. CET, 18 May, 2009.

The Volvo Group is one of the world`s leading manufacturers of trucks, buses and
construction equipment, drive systems for marine and industrial applications,
aerospace components and services. The Group also provides complete solutions
for financing and service. The Volvo Group, which employs about 100,000 people,
has production facilities in 19 countries and sells their products in more than
180 markets. Annual sales of the Volvo Group amount to about SEK 300 billion.
The Volvo Group is a publicly-held company headquartered in Göteborg, Sweden.
Volvo shares are listed on OMX Nordic Exchange Stockholm. Please visit
www.volvogroup.com for more information or visit www.volvogroup.mobi if you are
using your mobile phone.

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AB Volvo
Mårten Wikforss
Tel +46 31 66 11 27 or +46 705 59 11 49

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