Volvo Group's Mack Trucks and Volvo Trucks North America units are jointly implementing a US$60m (GBP32m) restructuring plan to increase efficiency.

The plan includes the relocation of Mack's head office from Allentown, Pennsylvania to Greensboro, North Carolina and concentrating Mack truck production at its plant in Macungie, Pennsylvania.

The restructuring cost will be booked in the second half of 2008, according to Volvo.

"The aim of the plan is to increase the effectiveness and efficiency of the North American truck operations and also to create better conditions for capitalising on the opportunities arising in the North American market," it said in a statement.

Plans include:

  • Moving the Mack HQ and all support functions, including product planning, product development and purchasing will move to Greensboro where many of the group's North American support functions are already concentrated.
  • Transferring assembly of Mack highway vehicles from the plant in Virginia's New River Valley to Macungie where Mack's construction and refuse vehicles are already assembled. After the transfer, all production of Mack and Volvo trucks will be concentrated in a single factory for each brand.
  • Restructuring of the parts distribution network that currently serves all of North America. The new organization will improve the network's competitiveness and provide better service to dealers and customers.

In conjunction with this restructuring, an investment of about $50m (GBP26.8m) is planned for a new engine block machining line at the Hagerstown, Maryland powertrain facility. This line would complement the group's global engine capacity and reduce logistics costs as well as exposure to currency fluctuations.

The transfer of vehicle production from New River Valley is planned for the upcoming fourth quarter of 2008.

The headquarters and support functions move is planned during 2009 while the consolidation of product development and purchasing will take place in 2010.

Restructuring of the parts distribution network will begin in 2009 with completion by the end of 2010.

The new Hagerstown block line is planned to be operational by the end of 2010.

Volvo said it would negotiate with the United Auto Workers (UAW) on the changes but plans to offer all affected employees jobs in other locations.

Mack and the UAW have already agreed that negotiations on a new labour contract will resume on 2 September.