Md. plant to make new truck engines

Hagerstown Mack factory chosen by Volvo for diesel assembly work

State feared loss of work

Current payroll of 1,200 is likely to be retained

May 29, 2002|By Ted Shelsby | Ted Shelsby,SUN STAFF

AB Volvo, the Swedish parent of Mack Trucks Inc., said yesterday that it will assemble its next generation of heavy-duty diesel truck engines at its plant in Hagerstown.

Volvo's decision is not expected to create many jobs for the plant, but state officials called it a critical move in retaining the work force of 1,200.

"This is the most significant economic development retention investment for the state of Maryland" in recent years, said David S. Iannucci, the state secretary of business and economic development.

Iannucci said Volvo also considered sites in Pennsylvania, South Carolina and Mexico for the engine work.

"Had it gone elsewhere, that would have been a frightening scenario for the 1,200 people who work at Hagerstown," Iannucci said, indicating that the big Washington County factory might have closed.

Robert Martin, a Mack spokesman, confirmed that other sites were considered for the engine work but declined to say how many or where.

Martin said the next generation of engines is under development and is not likely to be introduced and put into production until 2004 to 2007.

"It is too soon to say how our decision will impact production or employment at the Hagerstown plant," Martin said. "We can't say how many engines we will be making or how many employees we will have."

Iannucci said the decision to do the work at Hagerstown will result in a major retooling of the engine assembly plant requiring an investment of "millions and millions of dollars."

Mack officials declined to say more about the investment.

Iannucci said the state is preparing an aid package that would include tax credits, loans, worker training funds and other financial incentives. He declined to discuss the details.

Like most big U.S. manufacturers, Mack has cut back on employment in recent years as it moved to remain competitive in the world market for heavy-duty trucks such as tractor-trailers.

The Hagerstown plant had 4,600 workers in 1979.

Workers assembled about 30,000 truck engines and nearly 6,000 transmissions last year.

House Speaker Casper R. Taylor Jr. called Volvo's decision great news "for the long-term retention of good-paying manufacturing jobs in Western Maryland."

The Mack plant has 990 hourly workers, who are paid $22 an hour, including benefits, and 125 salaried employees making an average of $60,000 a year. It also employs engineers and purchasing workers.

Iannucci said he met with Lars-Goran Moberg, president and chief executive of Volvo Power Train Corp., in Boca Raton, Fla., in February as part of the state effort to lure the engine investment to Maryland.

He said Volvo officials later met with Gov. Parris N. Glendening as they narrowed their search for a production site.

Iannucci said the retooling of the Hagerstown plant will "set the stage for additional value-added manufacturing" in the region. He said more machining operations will be added later.

Hagerstown's transportation network helped attract the new engine project to Western Maryland, he said.

Martin said the new engines will be used in Mack and Volvo heavy-duty trucks.

Volvo completed its acquisition of Mack in January last year, Martin said.

AB Volvo is Sweden's largest maker of trucks and buses. Mack is based Allentown, Pa.

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