Spokesman: Mack's fate undecided

October 07, 2003|by JULIE E. GREENE

Mack Trucks Inc. officials have concluded negotiations with union members at the powertrain plant north of Hagerstown and are talking to state and county officials about more financial assistance, but a company spokesman said Monday the fate of the plant hasn't been decided.

Members of United Auto Workers Locals 171 and 1247 voted Saturday to approve amendments to their contract, said Mack Trucks spokesman John Mies in Greensboro, N.C.

Mies said more than 900 of the plant's almost 1,260 employees are union members.

Local union officials could not be reached for comment Monday.

Mies would not say what was covered by the amendments, but said they will expire Oct. 1, 2007. The unions' contracts with Mack expire Oct. 1, 2004, and will be renegotiated at that time, he said.


"As you know, we prefer not to discuss the terms of our labor agreements with the press, but I can tell you the amendments demonstrate that the UAW is willing to work with us to make an investment in the Hagerstown plant attractive to the Volvo Group," Mies said. Volvo bought Mack in January 2001.

"I'm talking about the investment in that facility that's necessary to make Hagerstown the site for North American Powertrain for Volvo Powertrain," Mies said. That includes having workers at the local plant manufacture a new family of engines that support both Mack and Volvo trucks, he said.

Mack's senior vice president of the Powertrain Division told 1,200 employees at the local plant in May 2002 that Volvo officials decided to center the company's North American Powertrain Division in Washington County, which meant that all the engines for Volvo trucks sold in North America would be made here.

But last month, Mies said a final decision had not been made about making that investment in the local plant and that the union's willingness to work with the company will affect that decision.

With union talks concluded, negotiations continue with the Maryland Department of Business and Economic Development and Washington County, according to Mies and government officials.

"I can say Mack Trucks has asked the county government and the state to put forward some incentives in the way of money and other items to have them remain here, to bring the engine line and to remain with the current operation the way it is here," County Commissioner Doris J. Nipps said.

Mack officials have not threatened to close the plant if a deal cannot be worked out, as far as Nipps knows, she said. However, Nipps said she has heard rumors from plant employees about the possibility of the plant closing.

"It's only rumor. There's nothing that's come from the company as a threat of any kind to close the plant if we don't meet (their) request," Nipps said.

When asked how optimistic he was that Mack would not shut down the local plant, Mies said, "I really think it's too early for me to characterize where we are in the process beyond what I've already told you."

"I can just confirm to you that there was a chance that the investment would not be made in Hagerstown," Mies said earlier in the interview. He would not speculate what it would mean for the plant if Volvo officials decide not to make the local plant the home for North American Powertrain.

County officials would not say specifically what Mack officials asked for, except to say the company wants more money and tax abatements.

State and county officials already agreed to a $5.7 million incentive package to keep at least 1,000 Mack jobs here, but by June/July, renegotiations began because the company wanted more, according to Nipps and Tim Troxell, executive director of the Hagerstown-Washington County Economic Development Commission.

That deal includes a $300,000 incentive package from the county government, according to Maryland Department of Business and Economic Development documents. A guaranteed rate for water and sewer costs, and grants that may be used for additional work-force training are in the package.

The state's portion of the deal includes $5 million in loans and a $400,000 grant.

The financing deal was contingent upon Mack retaining, in some cases, 1,000 jobs through December 2009, or the company would have to pay back the loans, Troxell has said. If Mack met its obligations under the deal, the company's loans would convert to grants.

"I can tell you discussions with the state are going well, and I can tell you that we expect to make a decision soon," Mies said Monday.

"I really can't get into the details about the issues management is considering as we bring this process to a close. The discussions with the state are one of those issues," Mies said. Mies would not say whether the requested incentive package would be the deciding factor.

"We would certainly, would like to see Mack Trucks remain here, would like to see them expand," Nipps said.

"Now the county doesn't have a bottomless pit of money. Can we meet their request? That, I don't know," Nipps said.

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