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Electronics Production | June 17, 2005

Autoliv announces major cost reductions

Autoliv Australia Pty Ltd, a subsidiary of Autoliv Inc, the world's leading automotive safety company, announced today plans to restructure in order to ensure a viable future. The plans affect 565 of the 900 Autoliv employees in Australia.
As a result of the first plan, 350 jobs will be moved to Korea and competitive cost countries, mainly China. The jobs that will be moved to Korea relate to the existing export from Australia to Hyundai and other customers in Korea. Another 150 positions will become redundant. This reduction of 500 jobs will be phased in during this year and 2006. These actions are necessary to ensure that Autoliv Australia remains competitive in a climate of global sourcing by the car companies and continued pricing pressure.

As a result of the other plan, VOA Webco, Autoliv Australia's seat belt webbing plant, has commenced discussions with its 65 employees. It is anticipated that the competitive cost pressures and lack of critical volume will force the closure of the VOA Webco plant within 18 months.

Autoliv estimates that the total costs for these actions will amount to approximately $5 million. The costs will be recognized gradually, with an expected start in the current quarter. Less than $1 million will be related to asset write-offs.

Autoliv Australia is a highly respected company with a reputation as an employer of choice. It believes that the measures it is taking will ensure that it is able to remain a strong company and will position it to take advantage of future opportunities.

During the last couple of years, Autoliv has consolidated its worldwide manufacturing base and closed down plants in, for instance, the United States, Sweden, the Netherlands and Japan. Manufacturing has instead been expanded in competitive cost countries. This has enabled Autoliv to remain competitive despite the pricing pressure in the automotive industry. As a result, Autoliv has increased its sales by 50% since 2000, thereby creating 7,500 new jobs globally, an increase of 25%.

In addition, Autoliv recently announced the closure of a plant in the U.K. with the transfer of the production to Turkey and other competitive cost countries. The company also announced the con-solidation of two plants in France.

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