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Volvo Group streamlines Mack, Volvo operations

LEHIGH VALLEY, Penn. -- Volvo Group has announced it will streamline its North American Volvo and Mack operations t...

LEHIGH VALLEY, Penn. — Volvo Group has announced it will streamline its North American Volvo and Mack operations to improve efficiencies.

The restructuring will cost US$60 million but will further the company’s competitiveness, the company said in a release.

“Through hard work and substantial investment over the last seven years, Mack now has a completely revitalized vehicle line-up, an entirely new engine range, and a dealer network that’s stronger than ever,” said Dennis R. Slagle, Mack president and CEO. “But our focus is on long-term leadership in a very challenging market, regulatory and economic environment, and this demands that we continue to improve our profitability and competitiveness.”

As part of the restructuring, Mack’s administrative headquarters will be relocated from Allentown, Penn. to Greensboro, N.C. where Volvo is currently based. That will occur in 2009, the company says. Mack’s highway trucks will be assembled at the company’s Macungie, Penn. plant rather than the current New River Valley, Va. plant, beginning in the fourth quarter of 2008. Volvo trucks will continue to be assembled at New River Valley, however.

The product development and purchasing functions will be moved from the Allentown Engineering Development and Test Center to Volvo’s tech center in Greensboro, the company announced. And the parts distribution network will be restructured to include a new Volvo Group North America central warehouse.

Mack officials said the company will inject US$20 million into its Macungie plant’s paint operation and a further US$50 million will be spent to install a new engine block machining line at the company’s Hagerstown, Md. powertrain facility.

“Taking these steps will make us a more efficient, agile, and cost-effective organization in almost every aspect of our business, from product development, to production, to aftermarket support,” Slagle said.

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