UPDATE: 13:40: Mario Freitas Junior, engineering manager and safety representative at Sveriges Ingenjörer: "A positive move"
I see this as a positive and long overdue action. It never made sense to me that Northvolt invested in all those other projects, instead of focusing on the core business.
The problem, in my opinion, was that Northvolt was overly aggressive in its expansion plan, and everybody that had previous experience in this business was impatiently expecting a course correction.
Unfortunately, this correction came a bit late, which requires more compromises to get back on the right track. But I’m glad they’ve finally done it because we can now focus on ramping up production to start earning revenues - in that way it’s a very positive move, especially as we are close to hitting our production targets.
I don’t think I’ll be directly affected by the cutbacks, and I’ll be very glad to know for sure I am safe, because we’ve adapted to Skellefteå now, and this is our home. I don’t think I’d want to go back to Brazil. I’d have to find another job in Sweden, but I’d only have a three-month window to find work if I lost my job here. That’s how work visas are.
One problem is that Northvolt told us that the cuts were coming, but not how they would be executed. This has generated a lot of speculation, and the uncertainty is a terrible thing to live with, especially for those that will be directly affected by this decision, like those working at US1.
Some of my colleagues think like me, that this is overall a positive move that will guarantee the company's success, but there are those who are more pessimistic and think that their department will be next. I understand that they feel insecure.
The execution needs to be carefully considered, because for foreigners like me, this could mean leaving the country which we now consider home.
UPDATE: 08:55: On Monday, Norran spoke with a Northvolt employee in Skellefteå who had attended one of several meetings held following the announcement of the mothballing of Upstream 1.
The employee reported that permanent employees in production were not expected to be directly affected by the cutbacks.
– Consultants, temporary employees, and those without permanent positions are more likely to be impacted, the employee explained.
– During the meeting, they assured us that permanent employees working in production should not be affected.
Other employees contacted by Norran confirmed this information.
– Consultants and employees on probation will be affected, one person said.
An employee at Upstream 1 also shared similar information after attending an informational meeting.
– Consultants will likely be affected first. The company will then attempt to reassign as many people as possible.
The employee mentioned that Northvolt plans to relocate some individuals to both Downstream (the production part of the factory) and Revolt, the recycling factory.
Matti Kataja, Northvolt's communications manager, told Norran on Monday:
– We haven't disclosed any specific numbers regarding the reductions yet. More details will be available in the near future. For employees at Upstream 1, our goal is to explore opportunities for them to transition to other positions within the company.
UPDATE: 16:00: As previously reported, the indefinite pause of Upstream 1 is the primary reason for Northvolt's planned staff reductions. Upstream 1 produces materials used in the production of battery cells.
As Norran has previously noted, Northvolt has encountered production challenges. Specifically, the section of the factory responsible for mixing raw materials for the battery's cathode has struggled to achieve the required quality standards. A significant portion of the output has been sent to the recycling plant Revolt, as Norran reported on August 27.
Additionally, Norran revealed that Northvolt has been purchasing thousands of tons of finished materials from China.
On Monday, an information meeting was held with Upstream 1 employees. According to an employee Norran spoke with, staff were informed that operations in the building would be halted immediately.
– We were told that all production processes would be shut down and the facility would be cleaned and emptied, the employee said.
Approximately 300 people work at Upstream 1, representing around 10% of Northvolt's workforce in Skellefteå.
UPDATE: 14:00: Taxpayers' money is not at risk. That’s the message from Finance Minister Elisabeth Svantesson (M) in the aftermath of Northvolt’s problems. She says the company cannot count on any help from the state.
UPDATE: 12:00: At the factory's barracks area in Ursviken, the few people we encountered were reluctant to speak to the newspaper. Many were hesitant to participate, especially with their names and photos. However, they did mention that the news had begun to be discussed in the area.
UPDATE: 11:00: There aren't many people moving around by the gates, but two workers, new on the job, stop and react to the news, which they hadn’t heard yet.
– It’s sad that so many are losing their jobs, says Viggo Larsson.
– But if they don’t have the money to pay wages, then they just don’t, adds Santo Nordgård.
EARLIER NEWS
On Monday Northvolt announced that they have to downsize the workforce in Skellefteå due to financial challenges.
Peter Carlsson, CEO and co-founder of Northvolt, commented:
“With the strategic review now underway, we are having to take some tough actions for the purpose of securing the foundations of Northvolt’s operations to improve our financial stability and strengthen our operational performance. While conditions at this time are challenging, there remains no question that the global transition towards electrification — and the long-term outlook for cell manufacturers, including Northvolt — is strong.”
The Northvolt board has decided that the operations at Northvolt Ett Upstream 1 cathode active material production facility in Skellefteå will be "placed into care and maintenance until further notice", Northvolt writes in the press release.
Sources suggest to Norran that this could affect up to around 300 workers at Upstream 1.
There are no final decisions made on the precise nature of any resizing, the company says in the press release:
"We remain in constructive discussions with the unions, and will ensure that every effort is made to minimize the need for redundancies".
Carlsson commented on the staff cuts in the press release:
“As difficult as this will be, focusing on what is our core business paves the way for us to build a strong long-term foundation for growth that contributes to the Western ambitions to establish a homegrown battery industry."
Northvolt's communications director, Matti Kataja, says that the company has not issued any layoff notices at this time. Negotiations with the affected unions will take place shortly.
– We have not disclosed any specific numbers regarding the cutbacks. This will become clearer soon. For employees at Upstream 1, our goal is to explore opportunities for them to transition into other roles within the company, he says.
CEO Peter Carlsson held an informational meeting with employees on Monday afternoon.
– It's incredibly difficult to have to announce a reduction in the number of employees. At the same time, we are following the proper procedures. We will speak with the unions and conduct negotiations, says Kataja.
Northvolt is not the first battery cell manufacturer to adjust its plans.
In June, the Automotive Cells Company (ACC), a joint venture between Stellantis, Mercedes-Benz, and TotalEnergies, announced that it was pausing construction work on its battery cell plants in Kaiserslautern, Germany, and Termoli, Italy, in order to transition to a different cell chemistry.
Additionally, in the early summer, the Chinese battery specialist SVOLT announced that it would not be moving forward with its planned plant in Lauchhammer, Germany, which was announced in September 2022. Meanwhile, the construction of the SVOLT factory in the German state of Saarland continues to be delayed.
REACTION:
Employees not shocked: According to an employee at Northvolt Ett, who spoke to Norran, Monday's announcement was not unexpected. As previously reported Northvolt has faced various issues in Skellefteå recently, and there have been indications of financial difficulties.
– We've basically just been waiting for an announcement like this. No one is surprised; it didn't come as a shock, says the employee.
Municipality is calm: Skellefteå's municipal director, Kristina Sundin Jonsson, says that with a major project like Northvolt, one should expect fluctuations.
– It's a natural part of such a venture to pause and reassess how to move forward, she says.
Sundin Jonsson, along with mayor Lorents Burman (S), learned of the news in a meeting with Northvolt representatives just before the factory's press release. She notes that the announcement doesn't cause concern for the municipality but understands the worry among those affected by the layoffs.
Northvolt has been a significant driver of the city's rapid growth, but Sundin Jonsson argues that it's just one piece of the puzzle.
– One could say that Northvolt has been a catalyst for Skellefteå's growth. However, we see that other major companies are also making substantial investments. Our foundation lies in our resources for the green transition, says Sundin Jonsson.
Unions concerned: Lena Lundgren, local coordinator at IF Metall in northern Västerbotten, says that the union has been summoned to negotiations this week.
– It's too early to say how our members may be affected, but hopefully we will receive more information about this soon.
A significant portion of the staff at Northvolt are members of IF Metall. According to Lundgren, this involves roughly 1,700 people.
– There is, of course, concern and many questions; what happens now, what does a layoff notice mean, and so on.
Volvo still a customer:
"We are closely monitoring developments at Northvolt. Volvo Cars continues to build a flexible and diverse battery supply chain across multiple markets and with multiple suppliers, and Novo is a part of that diversification strategy. We cannot provide further details at this time, states Kristin Boldemann Wester of Volvo Cars in a written statement regarding Northvolt's announcement.
A mother's concern: All of Ann Degerman's three children work at Northvolt. She has been in contact with all of them after the announcement.
– They've tried to reassure me and said they will keep their jobs, she says. Ann is worried about what will happen to Skellefteå if Northvolt fails.
– You're afraid it will become a ghost town, and that everything that has been built up will be left deserted, she says.
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