Mack Trucks Inc, Lehigh Valley PA, is planning a restructuring that will include moving the company’s administrative headquarters and most support functions from Allentown to Greensboro NC and transferring assembly of all Mack highway vehicles from the New River Valley VA plant to the plant in Macungie PA, according to Mack information.
Mack will consolidate product development and purchasing functions currently located in the Allentown Engineering Development and Test Center to the Technical Center in Greensboro. The Allentown facility will be converted into a Customer Demonstration/Reception Center that will also house personnel supporting Macungie production. Mack said the Allentown facility will be converted into a Customer Demonstration/Reception Center that will also house personnel supporting Macungie production. The New River Valley plant will continue to produce all the vehicles in Volvo Trucks North America’s range.
The movement of Allentown-based administrative and support functions to Greensboro is planned for 2009, while those functions currently performed at the Allentown Test Center are scheduled to move in 2010.
The movement of Mack highway vehicle production to the Macungie plant is planned for the fourth quarter of 2008. This move is expected to create at least 200 new positions at the plant. The company also plans to move approximately 200 people from the headquarters to the Customer Demo/Reception Center to support production.
The restructuring also will affect the parts distribution network serving its dealers and customers--to include creating a new Volvo Group North America central warehouse in a location to be determined; closing the Columbus OH and Dallas TX warehouses; and downsizing facilities in Baltimore MD, Chicago IL, Jacksonville FL, and Memphis TN. The restructuring of the parts network will begin in 2009 and be completed in 2010.
In conjunction with the restructuring, an investment of approximately $20 million is planned to improve the Macungie plant’s paint operation. An investment of approximately $50 million is also planned to install a new engine block machining line in the Hagerstown MD powertrain facility.
Just over 1,500 people work in the three Lehigh Valley facilities affected by the restructuring: about 680 at the Allentown headquarters, about 540 at the Macungie plant, and about 300 at the Test Center. The NRV plant currently employs about 1,600 people.
Mack said the impact on employees represented by the United Auto Workers will be subject to negotiation with the union, however, the company intends to offer all affected UAW members positions in other locations. Mack and the UAW have agreed that negotiations on a new labor contract will resume on September 2, 2008. The company will offer all affected non-bargaining unit employees relocation opportunities; severance pay and outplacement assistance will be provided to any employee that stays through the transition but ultimately leaves the company.