Volvo Global Trucks has announced a program to respond to a depressed North American market that shows few signs of a near-term recovery. The company's main actions are:
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Reducing North American industrial capacity by closing its Winnsboro SC plant.
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Consolidating North American support functions to eliminate duplication of effort between Volvo Trucks North America (VTNA) and Mack Trucks Inc.
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Strengthening of customer support and products.
As a result of the ongoing negative business cycle in North America, the total market for heavy trucks has plummeted from a high of about 309,000 units in 1999 to an expected 2001 volume of 170,000 (140,000 in the United States). Meanwhile, total industry capacity is about 380,000 units, with North American manufacturers currently running at a level of 120,000. About 30,000 new heavy-duty trucks are in industry-wide inventory.
The group's three assembly facilities — Mack's Macungie PA and Winnsboro plants, and Volvo's New River Valley VA plant — are operating at 30% of their total capacity of more than 130,000 trucks per year. To address this situation, operations at Mack's Winnsboro facility will be phased out within the next 15 months, at which point Winnsboro production will be transferred to the New River Valley facility and remain Mack-branded.
Mack and VTNA will maintain two separate headquarters, each with its own management and all functions necessary to deliver brand-specific products and services to core markets.
VTNA has announced a reorganization in order to properly align itself within the organization of its parent company, Volvo Global Trucks. Four areas will report directly to Michel Gigou, president and CEO of Volvo Trucks North America: truck sales and distribution, truck marketing, customer support, and parts sales and marketing.