* To develop technology with Chinese owner Geely
* Will keep brands separate
* Volvo biggest Chinese overseas auto investment
By Patrick Lannin and Norihiko Shirouzu
STOCKHOLM/BEIJING, Feb 20 Chinese car group
Geely's struggling Swedish brand Volvo is to cut 1,000 more jobs
and save more than $200 million to reach breakeven this year
after sales and Chinese growth have lagged.
Volvo, whose performance has been patchy since being bought
for $1.8 billion from Ford Motor in 2010, also said it and
Geely were to launch a research and development centre, one of
their most ambitious joint plans so far.
Volvo, based in Gothenburg, last year cut the number of
temporary contract staff on the workfloor. The new cuts will be
on the consultant and white-collar side, chief executive Hakan
Samuelsson said on Wednesday.
"One has to adapt to reality. We have done that on the
factory floor side, now we have to do it on the white-collar
side," he told SVT public television.
Spokesman Per-Ake Froberg said Volvo expected to cut about
750 consultant jobs and make the other reductions by voluntary
moves from permanent staff, such as early retirement.
"We plan to save 1.5 billion crowns ($237.2 million) during
the course of the year to reach a goal of breakeven," he added.
Last year, Volvo cut about 900 jobs. The company has around
22,000 permanent staff, the bulk, about 14,000, in Sweden and
nearly 4,000 in Belgium.
Sales rose in 2011, but recession in Europe and slowing
sales in China pushed 2012 sales down to 421,951 cars from
2011's 449,255 and caused a first-half loss.
Volvo aims to spend about $11 billion to reach 800,000 in
sales by 2020 and boost China to 200,000 from only 41,000 last
year, itself a drop of 10.9 percent. The U.S. market remained
the single biggest at 67,273 last year, up 1.2 percent.
Aside from falling sales, internal disagreements led to the
ouster of the chief executive last year and to Samuelsson's
The joint research and development centre planned by the two
companies is part of Geely's efforts to get as much benefit as
possible from its ownership of the Volvo brand and make savings.
Geely chairman Li Shufu said the centre would help Geely
improve the quality of its cars.
"However, the sharing of knowledge and technology has to be
done without jeopardising brand integrity and individual product
development," Li said in a statement.
Geely is stronger in the mass segment in China, while the
Volvo brand is aimed at the premium market.
The new R&D centre will employ about 200 full-time engineers
from Sweden and China and develop a new modular architecture and
components for new cars in the compact car class.
Volvo also expects a new plant in Chengdu in China, aimed at
being a key part of the expansion plan, to be up and running in
the second half of 2013.