Volvo Construction Equipment to Consolidate North American Operations

Companies that want to grow in the future must recede a little in this shrinking economy. In a move to improve the competitiveness and overall industrial efficiency of Volvo Construction Equipment, the company has decided to consolidate its North American industrial operations by removing excess industrial capacity in the Americas. As a result, the company’s Asheville, N.C., manufacturing facility will stop its activities by March 31.  

“Volvo CE’s commitment to the U.S. market remains strong,” said Olof Persson, president and CEO of Volvo CE. “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.”

The closing will affect 228 employees. Volvo CE will incur an estimated restructuring cost of $16 million, which will be recorded mainly in the fourth quarter of 2009. The production from Asheville will be moved to other existing Volvo CE locations, while at the same time ensuring uninterrupted supply to its North American dealers and customers. 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.

“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 of Global Operations. “We will do what we can to help our employees through the transition.”

A small number of employees from the Asheville plant will be offered positions in the company’s Shippensburg manufacturing operation. Employment opportunities in other North American Volvo Group companies will also be investigated. A comprehensive Human Resources plan has been developed which will include, but will not be limited to, counseling support and assistance in the search for new employment.