Air bag maker Autoliv to lay off up to 3,000

The company, which makes air bags and seat belts, didn't specify where the cuts will be made, but spokesman Henrik Kaar said its biggest production plants would probably be affected.

Stockholm-based Autoliv has 43,000 employees worldwide, with the biggest units in Mexico, France and the U.S. It has facilities in Auburn Hills and Southfield, Mich., and in Ogden, Utah.

The company said the restructuring program, expected to generate pretax savings of $120 million annually starting in 2010, are needed to mitigate the effects of production cuts by customers and accelerating costs for raw materials.

Autoliv expects the production of light vehicles--cars, sport utility vehicles and pickup trucks--to drop in the third quarter by 12 percent in North America and 5 percent in Western Europe. Those two regions account for 70 percent of Autoliv's revenues.

"These declines are expected to continue into the fourth quarter, while the strong production growth in the rest of the world is expected to level off," Autoliv said.

Kaar said the company was indirectly being hit by soaring gasoline prices. Not only are people buying fewer cars, he said, but they are increasingly turning to more fuel-efficient cars that are smaller and lighter.

"That means our products have to follow suit and become lighter," Kaar said.

The announcement came as Autoliv reported second-quarter profits of $90.4 million, up 57 percent from $57.5 million in the same period last year. Sales rose 10 percent to $1.91 billion.

Besides air bags and seat belts, Autoliv's products include steering wheels, anti-whiplash systems and child seats.