STOCKHOLM (Dow Jones)–Scania AB (SCV-A.SK) expects to save about 300 million Swedish kronor ($38.4 million) by reducing the work week to four days for its Swedish employees, a spokesman for the truckmaker said Friday.

Scania had salary-related expenses in Sweden of about SEK7.5 billion in 2008 and expects close to 10% in salary savings by cutting the work week, Hans-Ake Danielsson said.

Scania announced Friday it has agreed with unions about the shorter work week for the company’s 12,000 employees in Sweden. The agreement takes effect in June and will last for six months.

Scania has agreed not to issue any layoff notices to the affected workers during this period.

Danielsson said Scania, which has experienced a sharp drop in demand for its heavy trucks and buses since last autumn, is “not seeing any signs of a turnaround. I think you can say that without exaggerating.”

Scania, based in Sodertalje south of Stockholm, last month reported a 93% plunge in first-quarter net profit to SEK179 million.

Scania Chief Executive Leif Ostling said in a statement the labor savings will help the company “deal with the very sharp decline in market demand without further employee cutbacks.”

“Scania will stand well equipped when the market rebounds,” Ostling added.

In contrast, Scania’s Swedish peer AB Volvo (VOLV-B.SK) has given notice to more than 20,000 employees, temporary workers and consultants around the world, including many in Sweden, since the global financial crisis erupted last autumn.

via Article – WSJ.com.

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