Volvo Construction Equipment to Consolidate North American Industrial Operations

In a move designed to improve the competitiveness and overall industrial efficiency of Volvo Construction Equipment, the company last week announced it will 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, 2010. The closing will affect 228 employees. Volvo CE will incur an estimated restructuring cost of SEK 100 million (about U.S. $14.1 million), which will be recorded mainly in the fourth quarter of 2009.

The production from Asheville will be moved to existing Volvo CE locations while at the same time ensuring uninterrupted supply to the company’s 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, 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., USA, 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.

Volvo Construction Equipment produces a comprehensive range of wheel loaders, hydraulic excavators, articulated haulers, motor graders and compact equipment.

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