• DATVF.VSU
    1.385
    0.016
    1.2%
  • DATVF.PHLCHI
    0.943
    -0.053
    -5.3%
  • DATVF.VEU
    1.652
    0.027
    1.7%
  • DATVF.LAXSEA
    2.155
    0.031
    1.5%
  • DATVF.CHIATL
    2.209
    0.102
    4.8%
  • DATVF.VWU
    1.764
    0.049
    2.9%
  • DATVF.SEALAX
    1.373
    0.067
    5.1%
  • DATVF.VNU
    1.600
    0.030
    1.9%
  • DATVF.DALLAX
    1.030
    -0.019
    -1.8%
  • DATVF.ATLPHL
    1.803
    0.030
    1.7%
  • DATVF.LAXDAL
    1.740
    0.050
    3%
  • ITVI.USA
    10,250.710
    -46.410
    -0.5%
  • OTRI.USA
    7.920
    -0.400
    -4.8%
  • OTVI.USA
    10,244.810
    -70.470
    -0.7%
  • TLT.USA
    2.620
    0.010
    0.4%
  • WAIT.USA
    158.000
    8.000
    5.3%
  • DATVF.VSU
    1.385
    0.016
    1.2%
  • DATVF.PHLCHI
    0.943
    -0.053
    -5.3%
  • DATVF.VEU
    1.652
    0.027
    1.7%
  • DATVF.LAXSEA
    2.155
    0.031
    1.5%
  • DATVF.CHIATL
    2.209
    0.102
    4.8%
  • DATVF.VWU
    1.764
    0.049
    2.9%
  • DATVF.SEALAX
    1.373
    0.067
    5.1%
  • DATVF.VNU
    1.600
    0.030
    1.9%
  • DATVF.DALLAX
    1.030
    -0.019
    -1.8%
  • DATVF.ATLPHL
    1.803
    0.030
    1.7%
  • DATVF.LAXDAL
    1.740
    0.050
    3%
  • ITVI.USA
    10,250.710
    -46.410
    -0.5%
  • OTRI.USA
    7.920
    -0.400
    -4.8%
  • OTVI.USA
    10,244.810
    -70.470
    -0.7%
  • TLT.USA
    2.620
    0.010
    0.4%
  • WAIT.USA
    158.000
    8.000
    5.3%
NewsOEMTrucking

Volvo Trucks will lay off 700 workers in January (Update)

Latest cuts match industry’s extended production pullback in 2020.

Editor’s Note: Updates throughout with Volvo spokeman’s statement

Volvo Trucks North America will lay off about 700 workers in January, extending an industry pullback in production to match slowing orders of new Class 8 trucks.

Volvo’s Nov. 22 announcement comes weeks after about 80% of the workforce in Dublin was temporarily laid off due to a parts shortage stemming from a United Auto Workers strike at its corporate sibling Mack Trucks. 

The Swedish truck maker expects the overall heavy-duty market to be down about 100,000 units next year after an expected industry retail sales record of more than 300,000 units in 2019. Volvo expects to record 35,000 retail sales this year, the highest since 37,000 in 2015, according to Peter Voorhoeve, president of the Volvo Group of AB Volvo (OTC: VLVLY).

Fleets placed record orders in 2018 because of robust freight demand and extra money they had from federal corporate tax cuts.

Bullish orders end

But the bullish ordering ended about a year ago. Year-over-year orders fell for 10 consecutive months until an uptick in October. The industry backlog of trucks waiting to be built is less than half of the 298,000 in December 2018, Kenny Vieth, president of ACT Research, told FreightWaves. The backlog was about 127,000 units at the end of October. 

Most orders for 2020 are expected to replace older trucks rather than to add capacity. 

“In addition to dealing with lower demand, the industry has to burn through about 35,000 units of excess inventory,” Vieth said. “Higher demand requires larger inventories, but when that demand rolls off, the inventory has to be moved too.” 

Volvo’s VNL long-haul truck built in Dublin is expected to feel the pinch as long-haul freight demand softens with slowing economic growth and the growth of e-commerce driving more regional trucking.  

“We expect the total North American truck market to be down nearly 30 percent, or about 100,000 trucks, next year,” Volvo spokesman John Mies said. “And we expect one of Volvo’s core segments, the long-haul truck market, to represent a significant part of that reduction.”

Not alone

Mack Trucks has canceled two weeks of planned downtime before the end of the year because it is trying to make up production lost during at 12-day UAW strike in October that idled 3,500 workers at six facilities in three states. 

“We will continue to adapt to market conditions as necessary next year, but it’s too soon to discuss details,” spokesman Christopher Heffner told FreightWaves.

Daimler Trucks North America laid off 900 workers at two plants in North Carolina and several hundred workers in Mexico in October in the face of softening demand. 

Navistar International Corp. (NYSE: NAV) trimmed production at U.S. and Mexican facilities by about 15%, reversing additions made in late 2018. 

Kenworth Truck Co., a unit of Paccar Inc. (NASDAQ: PCAR), cut about 100 workers at the beginning of November. Its sibling, Peterbilt Motors, has not cut any jobs, general manager Jason Skoog said at the recent North America Commercial Vehicle show in Atlanta.

Future plans

Volvo production workers will be laid off the week of Jan. 20, Mies said.

“We regret having to take this action, but we operate in a cyclical market, and after two years of extremely high volumes, we have to adapt to reduced market demand,” Mies said.

The company’s only assembly plant in North America nearly doubled employment from 1,700 workers in January 2017 to about 3,300 presently, according to The Roanoke Times.

A $400 million plant expansion announced in June is expected to add 777 new jobs in coming years. Before the January layoffs, that would have raised peak employment to 4,000.

The Virginia General Assembly approved a $16.5 million state incentive package for the expansion. Pulaski County gave Volvo 221 acres of farmland adjacent to the plant and pledged $500,000 for public infrastructure improvements such as utilities and road access.

The layoffs were expected, State Delegate Nick Rush told the Times.

“They are expecting less production in the short term and more in the long term,” he said. “That’s why we approved the package.”

Tags
Show More

Alan Adler

Alan Adler is a Detroit-based award-winning journalist who worked for The Associated Press, the Detroit Free Press and most recently as Detroit Bureau Chief for Trucks.com. He also spent two decades in domestic and international media relations and executive communications with General Motors.

Leave a Reply

Your email address will not be published. Required fields are marked *

Close