Swedish auto safety systems maker Autoliv Inc. said Tuesday that it will cut up to 3,000 jobs about 7 percent of its work force to reduce costs, in the wake of falling car sales in Europe and North America.
The company, which makes air bags and seat belts, didn't specify where the cuts will be made, but spokesman Henrik Kaar said its biggest production plants would probably be affected.
Stockholm-based Autoliv has 43,000 employees worldwide, with the biggest units in Mexico, France and the United States. It has facilities in northern Utah, and Auburn Hills and Southfield, Mich.
Autoliv has about 3,600 workers at its six plants in northern Utah who are involved in research, development, manufacturing and assembly of air-bag components and modules. There are about 1,300 employees at the Brigham City facility; 300 at the Tremonton facility; 200 at the Promontory facility; 1,220 at the Ogden module facility; 80 at the Ogden service-parts facility; and 500 at Autoliv's Ogden Technical Center.
Ray Pekar, Autoliv's investor-relations and business-development director, said Tuesday that the company has not yet decided whether any jobs will be affected in Utah.
"We have no idea when it comes to where we will make the cuts within the company," he said. "We haven't made those decisions yet."
The company said the restructuring program, expected to generate pretax savings of $120 million annually starting in 2010, are needed to mitigate the effects of production cuts by customers and accelerating costs for raw materials.
"It's not a North American issue, it's not a European issue, it's not an Asian issue. It's global," Pekar said. "It's a global capacity adjustment and alignment."
Autoliv expects the production of light vehicles cars, sport utility vehicles and pickup trucks to drop in the third quarter by 12 percent in North America and 5 percent in Western Europe. Those two regions account for 70 percent of Autoliv's revenues.
"These declines are expected to continue into the fourth quarter, while the strong production growth in the rest of the world is expected to level off," Autoliv said.
Kaar said the company was indirectly being hit by soaring gasoline prices. Not only are people buying fewer cars, he said, but they are increasingly turning to more fuel-efficient cars that are smaller and lighter.
"That means our products have to follow suit and become lighter," Kaar said.
The announcement came as Autoliv reported second-quarter profits of $90.4 million, up 57 percent from $57.5 million in the same period last year. Sales rose 10 percent to $1.91 billion.Besides air bags and seat belts, Autoliv's products include steering wheels, anti-whiplash systems and child seats.
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