Volvo Trucks Plans Layoff of 500 Virginia Factory Workers

December 14, 2016 by Clarissa Hawes

Volvo Trucks North America plans to lay off 500 second-shift workers from its New River Plant in Dublin, Va., come February 2017.

The Swedish truck company, which sells both the Volvo and Mack truck brands in the U.S., has already laid off about 800 workers this year as it cuts production to adapt with sagging demand for heavy-duty trucks.

Following the upcoming layoff, approximately 1,450 workers will remain at the plant, down from the 2,800 employees it began with in 2016. The 1.6 million-square foot New River Valley Plant is Volvo’s largest truck manufacturing facility in the world.

“The downturn this year has been particularly hard on one of Volvo’s core segments, the long-haul truck market,” Volvo said in a statement. The company said it must “adjust production to demand.”

Volvo is not the only truck manufacturer forced to cut production to be in line with shrinking orders for new trucks.

Daimler Trucks North America laid off about 3,400 workers at its factories in the U.S. and Mexico earlier this year.

Manufacturers are expected to produce about 228,000 trucks in the U.S. and Canada this year, a 29 percent plunge from 323,000 trucks in 2015.

“In a nutshell, carriers added significant capacity in 2015 and a bit more in 2016, just as freight markets dried up in the aftermath of the popping of the global commodity price bubble,” said Kenny Vieth, president of ACT Research, a firm that provides monthly market analysis and forecasting for the new and used commercial vehicle market in North America.

Carriers added 8 percentage points of capacity to the U.S. Class 8 tractor fleet in 2015 and another couple percentage points this year, Vieth said.

But freight demand has not increased, he said.

“The American Trucking Associations’ Truck Loads Index has not budged on a year-over-year basis since April 2015, which is 19 months and counting,” Vieth said.

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