Volvo to close US factory

Volvo is to close its manufacturing facility in Asheville, North Carolina, US.

In what the company describes as a move to improve the competitiveness and overall industrial efficiency of Volvo Construction Equipment, the facility will stop production before 31 March 2010 as part of a consolidation of North American operations.

The closure will affect 228 employees and Volvo will incur an estimated restructuring cost of SEK 100 million (US$ 16 million), which will, in the main, be recorded in the fourth quarter of 2009.

Production from Asheville will be moved to other Volvo locations and the company has pledged to ensure an uninterrupted supply to North American dealers and customers during the consolidation.

A statement said the manufacture of wheeled loaders will move to Arvika in Sweden, excavators will be produced in Chang won in South Korea and the manufacture of cabs for motor graders will be moved to Shippensburg, Pennsylvania, in the US.

Olof Persson, president and CEO of Volvo CE said, "Volvo CE's commitment to the US market remains strong. This decision has no impact on the ongoing significant investments in Shippensburg, where the Volvo plant is being expanded to receive the motor grader production and the manufacturing of the grader cabs."

"Although this 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 statement said a small number of employees from Asheville would be offered positions in Shippensburg, while employment opportunities in other North American Volvo Group companies would also be investigated.