Volvo ends production lines at Shippensburg facility; 15 percent of workforce to be laid off

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The Volvo Group recently announced a global decision to eliminate some products from the Volvo Construction Equipment (Volvo CE) branded product portfolio. Two products made in Shippensburg, the motor grader and the milling machine will no longer be designed or produced by Volvo CE.   
 
As a result of the decision, the number of positions at Volvo CE’s facility in Shippensburg will be reduced. This change will impact employees in the factory and the office, across a variety of functions. In total, this represents approximately 15% of the employees based in Shippensburg, with employment changes happening incrementally through 2015.

“Right now we are focused on our employees,” said Operations Americas President Sean Glennon. “It’s always difficult to go through change, especially when it affects people’s employment, but we are committed to supporting people through the transition with care and respect.”

The Shippensburg facility remains an important part of Volvo CE’s global footprint as North America’s only production facility and a key engineering center.  Existing plans to localize additional wheel loader models to the facility will continue, with production beginning in the first half of 2015.

Glennon explains, “This announcement is difficult, but this prioritization of what products the company makes will ultimately help Volvo CE in Shippensburg.  We’ve made significant investments in Shippensburg over the past several years and now is the time to focus our efforts and resources for long-term success.”

Original report

In a move to cut costs, the Volvo Group is discontinuing production of motor graders at its Shippensburg facility, and laying off about 1,000 workers worldwide.

In a statement, Volvo provided no details on specific layoffs at Shippensburg. Volvo Group is also discontinuing production of backhoe loaders. Production of both lines is being transferred to Volvo Construction Equipment’s Chinese subsidiary.

“Combined with other efficiency enhancement measures, this will result in a workforce reduction of about 1,000 employees, of whom the majority are in Poland, the US and Brazil,” the statement reads.

A Volvo Americas spokesman declined comment today, adding that he needed to track down more information. The state Department of Labor & Industry reported no WARN notice from Volvo.

Motor graders are built at Shippensburg and Pederneiras, Brazil, while backhoe loaders are manufactured in Pederneiras and Wroclaw, Poland. Ceasing European production of backhoe loaders will result in the closure of Volvo CE’s operations in Wroclaw, Volvo announced.

The Shippensburg facility produced its first motor grader about four years ago. Volvo moved the motor grader line from Ontario to Shippensburg in 2010 as part of a $30 million plant expansion project.

The moves are part of Volvo’s overall plan to reduce costs by $3.5 billion, the release said.