Volvo to consolidate North American operations

Therese Dunphy

December 11, 2009

In a move to improve the competitiveness and efficiency of Volvo Construction Equipment (Volvo CE), the company has decided to consolidate its North American industrial operations. The company’s Asheville, N.C.,  manufacturing facility will close by March 31, 2010.  The closing will affect 228 employees. Volvo CE will incur an estimated restructuring cost of 100 MSEK ($16 million U.S.), which will be recorded mainly in the fourth quarter of 2009.

The production from Asheville will be moved to other Volvo CE locations. The company says supply to North American dealers and customers will not be interrupted. The manufacturing of wheel loaders will move to Arvika, Sweden; excavators will be produced in Changwon, South Korea; and cabs for motor graders will be moved to Shippensburg, Pa.

“Although the decision was necessary from a business standpoint, we fully understand that the affected employees – who in the current downturn are already going through challenging times – will face additional difficulties,” said Patrick Olney, executive vice president, global operations. “We will do what we can to help our employees through the transition.”

“Volvo CE’s commitment to the U.S. market remains strong,” said Olof Persson, president and CEO of Volvo Construction Equipment, “This decision has no impact on the ongoing significant investments in Shippensburg, Pa.,  where the Volvo CE plant is being expanded to receive the motor grader production and the manufacturing of grader cabs.”

A small number of employees from the Asheville plant will be offered positions in the company’s Shippensburg, PA manufacturing operation.  Employment opportunities in other North American Volvo Group companies will also be investigated.

A comprehensive human tesources plan has been developed which will include, but will not be limited to, counseling support and assistance in the search for new employment.

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