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Volvo's layoffs smaller than expected

July 17, 2007|by ANDREW SCHOTZ

WASHINGTON COUNTY - Layoffs at Volvo Powertrain North America's Washington County plant this year have been less than the company predicted last fall.

In October, Volvo Powertrain announced it would cut 600 jobs, or about one-third of the work force, because of an imminent slump in the market.

As of Monday, though, the company had trimmed far fewer jobs - about 340 - through a combination of temporary and permanent moves.

Volvo Trucks North America spokesman Jim McNamara said last year's estimate of cutting 600 jobs was a "worst-case" projection. He said he couldn't speculate on whether more cuts were coming.

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"(During) the first half of the year, the market was in line with our expectations," he said.

Jim Perkins, president of United Auto Workers Local 171, which represents employees at the Washington County plant, said many were concerned about the first half of 2007.

Because of new emission-control standards that went into effect Jan. 1, "there was a massive pre-buy in 2006," Perkins said. "Every manufacturer in the country built everything they could build."

Still, hauling companies need to buy trucks eventually, he said.

"We have weathered the storm and, hopefully, this is the worst of the storm," Perkins said.

Timothy Troxell, executive director of the Hagerstown-Washington County Chamber of Commerce, said it was "absolutely" good news that the job cuts have been "a fair amount less" than thought.

Mack Trucks also announced last fall plans to cut 450 out of 1,040 jobs at its Macungie, Pa., plant in the first half of 2007.

Mack Trucks spokesman John Walsh said in a voice-mail message on Monday that because the market slump was less severe than expected, the actual number of Macungie layoffs was 340.

Volvo Powertrain North America now has about 200 employees on voluntary layoff and seven employees on involuntary layoff, McNamara said.

Another 135 employees retired at the end of 2006.

Perkins said employees on voluntary layoff receive supplemental pay for 10 to 52 weeks. The supplemental pay is a flat rate, roughly 25 percent of full salary, he said.

Usually, older employees with more seniority and less danger of losing their jobs take voluntary layoffs to protect younger employees' jobs, Perkins said.

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