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Volvo cutting back production

December 10, 2008|By HEATHER KEELS

HAGERSTOWN -- Volvo Powertrain North America's Washington County plant will cut back production rates for engines and transmissions effective Jan. 5, spokeswoman Ilse Ghysens said Wednesday.

The plant will cut engine production 25 percent, to 83 per day from 110, and will cut transmission production 36 percent, to 21 per day from 33, Ghysens said.

Ghysens said she could not say whether there would be layoffs associated with the cutback because that is under negotiation with United Auto Workers.

"It's a very precarious situation," she said.

Within the past three months, Volvo has cut more than 2,000 jobs worldwide, attributing the cuts to a weakening market for commercial vehicles.

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In October, Volvo Powertrain cut 65 positions at the Washington County plant. As of Nov. 30, that plant had 1,262 employees, Ghysens said.

The plant is adjusting its production levels because fewer orders are coming in, Ghysens said.

"The reason is very simply because our truck and bus customers are also facing the economic downturn," she said. "When they have lower demands, that impacts us as well."

The production cutback will continue indefinitely, Ghysens said.

"It all depends on the economic downturn," she said. "As soon as they pick up, we pick up."

The news comes on the same day that Mack Trucks announced plans to lay off 180 employees at its factory near Allentown, Pa., and extend its annual end-of-year production shutdown at that site.

Volvo acquired Mack Trucks in 2001. The Volvo Powertrain plant off of Pennsylvania Avenue near Hagerstown produces parts for both Volvo and Mack.

Mack Trucks Inc. spokesman John Walsh on Wednesday cited economic conditions as the reason for the Allentown layoffs.

Walsh said those layoffs will take effect at the close of production at the plant Dec. 23. Production will resume with reduced manpower during the week of Jan. 12.

The Allentown plant employs about 680 workers making heavy trucks.

Four months ago, Mack announced it would move its headquarters and testing center to Greensboro, N.C., from Allentown.

Mack recalled about 150 workers in October due to more orders from Latin America, the Middle East and Africa.

The Associated Press contributed to this report.

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