Volvo expansion means new jobs
5 May 2012
By MARCUS RAUHUT
Volvo Construction Equipment broke ground for an expansion in Shippensburg expected to create hundreds of new jobs over the next several years.
Shippensburg will serve as the company’s headquarters for operations in North and South America. Work on the first phase of a $100 million expansion is scheduled to start within the next week Volvo CE, which manufactures road construction equipment in Shippensburg, is consolidating work from Asheville, N.C. This will immediately result in about 200 positions in Shippensburg.
The company will also begin manufacturing new product lines here, which is expected to create hundreds of additional jobs.
“We’re here to create jobs,” said Goran Lindgren, president of sales for the company’s Americas region. “We have a history of being close to the communities we serve and we will continue that here.”
The impact of the expansion will be felt far beyond the company itself.
A customer demonstration building that is being relocated from North Carolina currently draws about 10,000 visitors a year, and the new center may draw even more. That signals a boon to the local hospitality industry.
The company is also committed to using local suppliers to speed up production times. That means as business at Volvo grows, local suppliers will also benefit.
With about 800 employees, Volvo is already the second largest manufacturer in Franklin County and is one of the largest private employers in the county.
The company acquired the Shippensburg plant and another facility in the Cumberland Valley Business Park as part of the $1.3 billion purchase of Ingersoll-Rand’s road construction division in 2007.
Since then, the Shippensburg plant has seen steady growth, including a $30 million expansion that opened in 2010 after the company brought in production lines from Goderich, Ontario. Because the company has already invested heavily in the Shippensburg factory, officials said it made sense to consolidate operations here.
Andy Knight, president of operations for the company’s Americas region, said Shippensburg was also a desirable location because of the transportation infrastructure, proximity to population centers, available land, and support from the community.
The first phase of the latest expansion includes building a new headquarters building for the Americas. About 200 sales jobs from Asheville, N.C., are being moved to Shippensburg. All employees were offered the opportunity to relocate, and a Volvo spokesperson said about 55 percent chose to relocate here.
“We’re very proud of those numbers,” Lindgren said. “Before we did the move, we did a lot of research and we only expected 15 to 20 percent to move.”
Some of the employees from North Carolina have already relocated and are working out of a temporary office in Shippensburg.
The headquarters office is expected to open next year. A rental headquarters is also being moved to a new location on Walnut Bottom Road.
Volvo CE currently makes about 50 models of asphalt pavers, soil and asphalt compactors, milling machines and motor graders in Shippensburg. Products made there are shipped globally, but most are bound for customers in North America.
Knight said the company plans to begin making wheel loaders next year and then introduce excavators and articulated haulers in the following years.
The exact number of new jobs resulting from the new product lines will depend on economic conditions, but the company said the number will be in the hundreds.
“Overall, we’re seeing improvement in our markets. We’re seeing a lot of replacement (of equipment),” Lindgren said. “There’s a lot of waiting for the highway bill. Once we see an extension of the highway bill, that will bring confidence back.”
The Volvo name is probably best known for the cars, but the Sweden-based Volvo Group includes companies that make construction equipment, trucks and buses, as well as boat and airplane components. Volvo Powertrain, a major employer in Hagerstown, Md., is also part of the Volvo Group.
Volvo CE is one of the largest makers of construction equipment in the world, and the company said Shippensburg is playing an increasingly important role in the company’s overall operations.
The factory could eventually produce 70 percent of Volvo CE machines sold in North America.
Marcus Rauhut can be reached at firstname.lastname@example.org and 262-4752, or follow him on Twitter @MarcusRauhutPO.
About the new office
The design of the new Americas headquarters building follows in the footsteps of an ongoing expansion project in the factory.
The new office building will be 36,000 square feet, consisting of two floors and a “bridge” that will connect the new building with existing facilities. Efforts are also being made to secure LEED certification for the office building.
Leadership in Energy and Environmental Design certification requires that buildings be designed, constructed and operated with careful consideration for environmental impact and the health of occupants.
The Shippensburg facility recently received a Silver LEED certification for the 2010 expansion of the manufacturing area.
Operations President of Volvo CE Americas Andy Knight says the Shippensburg campus will be a world class facility.
“We are an industry leader in so many ways and the actual facility we work in is no different. The infrastructure investment is just one way we are living Volvo CE core values of quality, safety and environmental care,” Knight said