Volvo Powertrain signs agreement on shortening of work hours for collective-agreement employees

Volvo Powertrain signs agreement on shortening of work hours for
collective-agreement employees 

The Volvo Group's unit for engine and gearbox production, Volvo Powertrain, has
signed an agreement with the local IF Metall trade unions in Skövde and Köping,
Sweden regarding the shortening of work hours with subsequent income reduction.
The agreement results in the cancellation of the layoff notices to 600 employees
in Skövde and Köping issued on April 22. 

The agreement with the local IF Metall unions in Skövde and Köping applies from
June 1, 2009 through March 31, 2010. Work hours will be reduced by 20%, pay
reduced by a maximum of 8% during the agreement period and the year's pay review
will be postponed until March 31, 2010. The company also guarantees that no new
layoff notices will be issued during the agreement period. In the voting carried
out among IF Metall's members earlier this week, a majority of 86% voted in
favor of the proposed agreement in Skövde and 93% in Köping. The agreement
covers 2,450 employees in Skövde and Köping. 

Volvo Powertrain signed an agreement on May 18 with the salaried-employees local
unions in Köping regarding shortening of work hours with income reduction. The
agreement, which covers 180 salaried employees in Köping, also includes the
management group for Volvo Powertrain in Köping and as a result the layoff
notices for 25 salaried employees issued in April 25 have been withdrawn.
Negotiations are under way regarding an agreement on shortening of work hours
for the other salaried employees within the company's Swedish division.

“The agreements on shortening of work hours are extremely important for us since
it is then possible to retain expertise in the company despite the highly
substantial reduction in demand,” says Peter Karlsten, President of Volvo
Powertrain. “As a result of this solution, we are better prepared when the
market turns upward again.”

May 29, 2009
Reporters who want more information, please contact:
Mårten Wikforss, AB Volvo, tel +46 31 66 11 27 or +46 705 59 11 49

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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 10.00 a.m. CET, 29 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.
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