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Mack might expand

June 21, 2000|By LAURA ERNDE

Local officials hope that Mack Trucks Inc.'s Hagerstown engine plant will get more business as a result of an announcement by Volvo Group.

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The Swedish company's president and chief executive officer said Tuesday it will build more engines in the United States as part of its purchase of Mack. But Leif Johansson declined to say whether the engines will be built at Mack's Hagerstown plant or at a new U.S. plant.

Local Union President Maurice Kaiser said he is encouraged by the news.

"It'd be a big boost for Hagerstown if we do it," said Kaiser, president of United Auto Workers Local 171, which represents 1,144 of the 1,400 employees at the plant.

Kaiser said the Pennsylvania Avenue plant has the space to build more engines.

John Howard, executive director of the Hagerstown-Washington County Economic Development Commission, said he hasn't been notified of any impending expansion at Mack.

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But the timing of the prospect could not be better, he said. State and local officials over the weekend celebrated Mack's 100th anniversary as well as the company's 39 years in Hagerstown.

"Our pride showed, we believe, very well," he said.

Both Howard and Kaiser said the Hagerstown area has an advantage in having a work force trained in automotive technology skills.

Companies often find it more cost-effective to expand current operations than build new facilities, Howard said.

Mack spokesman John Mies said the news is consistent with earlier statements about the proposed deal.

"We've said all along that we believe that this deal would not have a negative impact on any of our Mack facilities and it would present opportunity for growth," Mies said.

Volvo announced in April it would buy the truck division of Renault SA, including Mack, for $1.83 billion in stock and assumed debt. The deal, expected to be completed in two to nine months, must be approved by federal regulators.

Speaking to management at the Mack's Allentown, Pa., headquarters this week, Johansson described the merger as good for all the companies.

"There are few times in an industrialist's life when he can do something with such strong positive and no negative effects. There will be no layoffs," he said.

However, Mack said in May it would reduce production at all its sites, cut the second shift at its South Carolina assembly plant and lay off 360 workers, about 6 percent of its 6,200-member work force. Johansson blamed those cutbacks on a general slowdown in the North American truck market, not the merger.

Mack, Renault and Volvo will keep their brand identity, remain with separate dealer organizations and separate product lines, Johansson said. Eventually, there will be a wider selection of blended Volvo, Renault and Mack products.

The Associated Press contributed to this story.

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