Volvo announces new CEO and US$ 100 million expansion

President and CEO of Volvo Construction Equipment, Olof Persson, will replace Leif Johansson as group president and CEO in September this year.

As of 1 May, Mr Persson will assume the role of executive vice president and deputy CEO, working in parallel with Mr Johansson, who is retiring in the autumn. The company said Mr Persson's successor as president of the construction equipment division would be announced in the near future.

The news comes as Volvo Construction Equipment announced plans to spend US$ 100 million on expanding its US manufacturing facility in Shippensburg, Pennsylvania, and relocating its North American sales headquarters and rental centre.

The two-year investment plan will see Volvo's factory begin production of wheeled loaders, excavators and articulated haulers, while Volvo Rents and Volvo's sales unit will move from Asheville, North Carolina, to the Shippensburg, site by September 2012.

Mr Persson said it made sense for the company to manufacture products close to where its customers are.

"The global demand for Volvo construction equipment is rapidly increasing and we need to make investments to meet future demands in the region. Producing Volvo wheeled loaders, articulated haulers and excavators in Shippensburg will result in shorter lead times for our customers," Mr Persson said.

He added that the decision to bring more production to the US would also reduce Volvo's exposure to exchange rate fluctuations.

The company plans to build a customer and demonstration centre in Shippensburg together with a new office building to house its regional sales headquarters, the Volvo Rents offices and a training centre.

Volvo acquired the Shippensburg facility in 2007, and invested US$ 30 million in June 2010 to expand the plant by 200000 ft² (18600 m²). The increased production space allowed the company to incorporate the production of motor graders at the facility.

Volvo said manufacturing wheeled loaders, articulated haulers and excavators at the site would have "no significant impact" on their current production in other Volvo locations.