“This is really about Volvo’s ongoing commitment to North American market,” said Pat Olney, president, Volvo Construction Equipment in remarks made during Thursday’s inauguration of Volvo’s $100 million plant expansion in Shippensburg, Pennsylvania.
Before a crowd of dignitaries, including Federal Highway Administrator Victor Mendez, Volvo unveiled a commemorative L60G wheel loader, sporting American flag cladding on one side and a Canadian flag on the other. The company says it initially will produce its L60, L70 and L90 loaders at the plant.
Infrastructure investment was also the focus of comments made by Federal Highway Administrator Victor Mendez, in an impromptu press conference following the ceremony. In the video below you can watch the unveiling of the commemorative L60G and watch as Mendez talks about the concept of an infrastructure bank.
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The total Volvo investment in Shippensburg includes the firm’s new 36,000-square-foot Americas headquarters building (serving both North and South America) and a customer center slated to open the first quarter of 2014. Volvo also says it will make excavators and articulated haulers at the plant, although the timing for those machines is still undetermined, Olney said.
In addition, the company has moved its paver production from Shippensburg to a nearby facility in Letterkenny, Pennsylvania, realigning production flow to meet customer demands for both shorter lead times and machine customization. The paver facility will also perform machine rebuilds.
Olney used the event to talk about Volvo’s 2013 outlook. “When you consider our markets altogether, we see 2013 is essentially as a sideways movement,” Olney said. “Europe right now is really a challenge, and we’re expecting a decline there between 5 to 15 percent. North America has reason to be both optimistic and concerned, but again, it will be a sideways movement, especially as we look at the projected GDP in the United States.”
Volvo says it has made several moves to expand its worldwide presence, announcing plans for an April inauguration of its excavator plant in Russia, establishing a backhoe plant in India, plus moving its Americas backhoe production from Mexico to Brazil by the end of this year.
“With our whole machines, we’ve moved from using economies of scale, producing and shipping machines in one place, to product hubs that are close to the customer,” Olney said. “This means less lead time and more flexibility. In addition, we’re creating jobs locally, both here and throughout our supply chain.”
“I really do believe there’s a huge potential here in the United States,” Olney said. “The lack of infrastructure investment affects the productivity of the country.”
“We stuck by this investment plan for Shippensburg even in the down years,” Olney concluded. “We fundamentally believe the Americas is one of the world’s largest markets. This factory is ready to capitalize on the growth we feel will come.”
Volvo acquired the Shippensburg business from Ingersoll Rand in 2007. In addition to wheel loaders and pavers, the company makes asphalt compactors, motor graders, screeds and milling machines in Pennsylvania.