SWEDEN: Pay for No Work

In mid-1973 Sweden's Volvo announced that it would become the first foreign auto manufacturer to build an assembly plant in the U.S.A site had been selected at Chesapeake, Va., to start production in the spring of 1977. But with that deadline at hand, Volvo has postponed start-up indefinitely, leaving Volkswagen as the only foreign carmaker with firm plans to assemble in the U.S., beginning in early 1978.

What went wrong? The quick answer is that Volvo's car sales in the U.S. fell from a peak of 60,338 in 1975 to 43,887 last year, a decline of 27.3%. But that drop...

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