It seems the construction and the mining industry is the worst hit industries in 2014, which is why they are finding it tougher to recuperate in the forthcoming year. It has been seen that many companies saw a huge decline in their sales due to which they are forced to take some real tough decisions. Undoubtedly, these decisions also had an impact on the industry as a whole. Not only the sales figure dipped but also there were jobs cut throughout the industry which became a matter of concern for many. Hiring were the lowest across sectors and many people who completed their studies in civil engineering or learnt about machines were finding hard to get to a job.
Many heavy equipment manufacturing companies were of the view that they should be calling off their overseas markets, shrink their business to a certain extent and focus more on home turf. Others were of the view to pay more attention in countries that was giving them profits. It means that they were ready to take risks to produce more equipment for countries that showed them opportunities and by doing that, they were able to keep afloat in turbulent tides.
Volvo also gained success internationally but in some countries, it did not do well and that resulted in forcing them to cut jobs of its employees. Volvo is world’s 2nd biggest truck manufacturer and has a reputation of producing world-class trucks and delivering them all over the world. Many countries in Asia, Middle East, Africa, and Europe and in the America uses their products to cater the needs of the customer. However, the year 2014 was not at all good for them. They experienced a severe fall of demand for trucks and were finding it difficult to sustain. It became important for them to take some stringent decisions and they decided to lay off few people from the company. They are of the view to eliminate around 2000 jobs by 2015 which will happen in a phased manner. By that time, if the business picks up, they might reconsider their decision. Or else, they might have to stick to the old plan. It is assumed that the reorganization costs will be around $766 million and the annual savings is estimated to be lower than that.
Company biggies are worried about the reaction that their decision will have on the stock exchange. They were optimistic and feel that the market will react positively to their decisions as they understand the need of the situation. Volvo’s mission is to attain highest operating margins in the entire industry. They have planned to liquidate a North American unit. It is estimated to be over by the end of January. Volvo is also focusing on paying the same amount of dividends that will help a little to keep the prices of their shares intact.
Volvo feels that the year 2015 will be the year of efficient machines and cost reduction. If the company is able to attain these things, they will be able to sustain for now.