Financial Struggles for Battery Producer: Closing Parts of Factory in Northern Sweden
The giga factory Northvolt Ett in January 2024. Today, about 3000 people work at the factory in Skellefteå in Northern Sweden. 300 of these could lose their jobs after Northvolt's announced downsizing. (Photo: Northvolt)
Battery producer Northvolt has had to implement drastic measures due to its financial situation. It is announcing, among other things, layoffs and the closure of parts of the factory in Northern Sweden.
The battery company Northvolt has announced redundancies and will close part of the factory in Skellefteå in northern Sweden. This is revealed in a press release from the company this week.
Northvolt refers to the new strategic review that has been carried out due to the company's difficult financial situation. Now, the company is implementing drastic measures to deal with its financial problems and to stake out the way forward.
The background for the review concerns, among other things, production disruptions, production that has not gone as planned, and billions in losses, reports national radio broadcaster Sveriges Radio.
"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," comments Peter Carlsson, CEO and co-founder of Northvolt, in the press release.
"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," says CEO Peter Carlsson of Northvolt. (Photo: Northvolt)
Northvolt Ett is the company's giga factory for the production of lithium-ion batteries in the Northern Swedish town of Skellefteå, and one of the measures the company will now implement is to close down parts of the factory until further notice.
The operations at the part in question include cathode active material production for batteries. About 300 people are employed at the impacted part of the factory, according to Sveriges Radio.
"The cost-saving mechanisms necessary for Northvolt to meet its core objective of focussing on large-scale cell manufacturing will regrettably include some difficult decisions on the size of our workforce to match the needs of a reduced scale of operations," reads the press release.
Northvolt does not reveal how many will be affected by the closing. Furthermore, the company writes that no final decisions have been made on the precise nature of the downsizing.
"We remain in constructive discussions with the unions and will ensure that every effort is made to minimize the need for redundancies."
No help from the state
In connection with the news from Northvolt, questions have been asked about whether the Swedish state will step in to help Northvolt.
Speaking to the Swedish news agency TT (reproduced by Dagens industri), Sweden's Finance Minister Elisabeth Svantesson (M) says that this is not relevant at the present time.
The Swedish state has not lent anything to the battery manufacturer, says Svantesson. On the other hand, she says there are many state-issued loan guarantees via the Swedish National Debt Office, but these have never been paid out. According to the Minister of Finance, the money the public has contributed via various authorities is about SEK 600 million via Industriklivet and others.
"There has been a lot of speculation in recent weeks about the state's interference and how much of the taxpayers' money is at stake. That there is [talk about, ed.note.] many billions at stake. But this is not the case," says Svantesson in an interview with TT, reproduced by, among others, Dagens industri.
Focusing
According to economic reporter Victor Jensen in Sveriges Radio, it was expected that Northvolt would do something due to the financial problems and the restructuring that is now taking place.
"You simply look more closely at what to go for and where you want to put the money. For example, it has been said that the focus going forward will be on large-scale production of batteries for vehicles, such as e-trucks and electric cars. In the past, there have also been some other side businesses. It was expected that a change would be made as the company has financial problems."
In addition to the factory in Skellefteå, the company has operations in several other places in Sweden, as well as in Europe.