Company’s CEO also predicts flat sales in 2013.
Volvo Construction Equipment (Volvo CE) has cut the ribbon on a $100 million expansion program at its Shippensburg, Pa., facility. In addition to the official opening of a new headquarters building for Volvo Americas, the event also marked the start of wheel loader production at the Shippensburg plant.
Volvo says the investment “affirms [its] long-term confidence in the North American market and consolidates its North American operations onto one site.” The opening of the new building also coincides with the relocation of the Volvo CE sales office from Asheville, N.C., to Shippensburg.
“This should serve as a very clear signal that Volvo CE is committed to this market and in a better position than ever before to offer our customers products that are made by Americans, for Americans,” says Volvo CE President Pat Olney. “Longer term, building machines closer to our customers will have a positive impact for U.S.-based suppliers, who will gain more business; for customers, who will enjoy shorter lead times; and for Volvo CE, which will be less exposed to currency swings.”
In his address at the ceremony, Olney outlined his belief that the market will remain flat in 2013 with the potential for sales in North America to swing anywhere between a 5 percent gain and a 5 percent loss.
“The North American market has been challenging for a number of years, but last year saw an improvement over the year before,” said Olney. “While we feel the economic climate points toward a flat development in the short term, we also see an upside going forward. The investment we are unveiling today is a sign of our long-term confidence in North America and our commitment to the market here.”
Wheel loader production in Shippensburg will initially start for the L60 to L90 range of loaders. “These machines are in high demand in North America. It’s easier to start up production of smaller machines and work our way up,” said Sean Glennon, vice president of operations at the Shippensburg facility. Volvo CE also intends to open a customer center in the area in the first quarter of 2014, according to Glennon.
The Shippensburg facility has been producing equipment for nearly 40 years. Volvo CE acquired the plant from Ingersoll Rand in April 2007. A $30 million 200,000 square foot expansion was completed in June 2010 and included a new assembly area and materials building. The office expansion, which opened in March 2013, adds 36,000 square feet. Additionally, two smaller production buildings, which opened in April 2013, provide an additional 37,000 square feet, bringing the total size of the expanded facility to 650,000 square feet.