Volvo to build some trucks in Mexico plant

Company says Mack production will continue in Lehigh Valley, but union, local lawmakers upset

With production increasing at its U.S. plants, Volvo Group announced Thursday afternoon that it will build a heavy-duty truck plant in Mexico to supplement North American fabrication, while making further investments in two U.S. plants, including Mack Trucks Lehigh Valley Operations in Lower Macungie Township.

The owner of Mack Trucks said it plans to invest $80 million in the LVO plant for future production. The company said the Lehigh Valley plant and the Volvo Truck plant in Dublin, Virginia, will remain the main heavy truck production sites in North America.

However, the union representing 2,300 workers at LVO was not happy with the announcement.

United Auto Workers Local 677 Shop Chair Tim Hertzog said in a letter posted on the union’s website that members were “extremely disappointed” in Volvo’s decision to build a Class 8 plant in Mexico.

He said local union leadership had been working with local and state government officials to build a state-of-the-art plant in the Lehigh Valley.

“We are looking into the contractual obligations for build rates in LVO operations and the potential legal ramifications for this decision,” he said.

Hertzog added the issue will be discussed further with the UAW.

“This is a slap in the face for all of us,” Hertzog said. “The company provided us with the information at 11:45 a.m. [Thursday]

and told us that it would be published at 12 p.m.”

Volvo said it has invested more than $73 million over the last five years in LVO expansion and upgrades. The Virginia plant is completing a six-year, $400 million expansion/upgrade to prepare for production of the new Volvo VNL model.

A Volvo spokesperson said the additional $80 million will be used for tooling and equipment to prepare for future production. Whether that translates into additional jobs “will always be driven by demand, but our plan is to continue to produce at a high level at LVO,” Volvo’s John Mies said. “LVO and NRV [in Virginia] will remain our main North American plants.”

The announcement comes about five months after 3,900 unionized workers at LVO and four other facilities voted to end a 39-day strike with a five-year contract that was approved by 93% of membership.

The strike started Oct. 1 after workers rejected an initial agreement with 73% of the vote. A big reason was a perceived lack of job protections at LVO.

Known as Letter 3, it was revised during negotiations to include making LVO operations the primary facility for current and potential future Mack Class 8 Trucks and Class 8 Heavy Trucks and assuring the company will “not close LVO Operations for the term of the agreement.”

A group of Lehigh Valley state legislators — Democratic Reps. Peter Schweyer, Jeanne McNeill, Mike Schlossberg, Josh Siegel, Robert Freeman and Steve Samuelson, and Democratic Sen. Nick Miller — called the move “concerning” in a joint letter.

“It is hard to understand why Volvo would choose to build this All-American line of trucks outside of the United States,” the letter said.

While they view Volvo as a key part of the Valley’s economy and community, they said their loyalty is with the “hard-working men and women that made Mack Trucks the successful and iconic brand that it is today.”

“We appreciate Volvo Group’s continued investment in the Lehigh Valley and will work in good faith with them to ensure the longterm success at that facility,” the letter said. “In return, we expect that they return that good faith with a long-term and public commitment to the LVO Plant.

“Our region has seen this play out before with Mack Trucks (albeit under different ownership) and people understandably are worried. Rest assured, we will continue our conversations with Volvo Group and the United Auto Workers to ensure the preservation of the LVO Plant for generations to come.”

Volvo said the Mexico plant will be approximately 1.7 million square feet, and focus on production of heavyduty conventional vehicles for the Volvo and Mack brands. It will be a complete conventional vehicle assembly facility including cab body-inwhite production and paint.

“The [Mexico] plant will provide additional capacity to support the growth plans of both Volvo Trucks and Mack Trucks in the U.S. and Canadian markets, and support Mack truck sales in Mexico and Latin America,” the Greensboro, North Carolina, company said in a news release.

The plant is expected to be operational in 2026.