Scania will lower its production rate at its facilities in Europe and Latin America from this month, as the company foresees a continued slowdown in demand in these markets.

This adjustment will be handled within the terms of existing flexibility agreements between the company and the respective trade unions.

In a press release, the company said that economic worries in Europe and the world have made customers more hesitant about investing in new products.

In November 2011, Scania reduced its production rate by about 15 per cent at the global level, but since then demand has deteriorated further.

“The slowdown in Europe and the Middle East has continued. Meanwhile we are also seeing a lower rate of order bookings from other markets,” said Martin Lundstedt, Scania’s Executive Vice President of sales and marketing.
Scania will now lower its production rate by a further 15 per cent (approx.).

“This implies that we must gradually adjust staffing, which unfortunately means that we will be unable to renew the contracts of more than 1000 fixed term temporary employees in our global production network,” explained Anders Nielsen, Scania’s Executive Vice President of production and logistics.

Following the November cutbacks, the contracts of 900 of a total of 1,400 fixed term temporary employees at European production units were not renewed. Most of the remaining fixed term temporary employees in Europe will now also be affected, along with a majority of the fixed term temporary employees in Latin America.