Although Volvo Group has contributed to Pennsylvania’s economy for more than a century, the company really “built” up its presence when Volvo Construction Equipment (Volvo CE) gained an facility in Shippensburg as part of the company’s 2007 acquisition of Ingersoll Rand’s road machinery division.
Since 2010, Volvo CE has completed several major investments in its Shippensburg operations, totaling $145 million.
Combining those investments with the rest of the Volvo Group, the company’s annual contribution to the state’s economy is quite impressive.
- The Volvo Group has over 3,100 employees in Pennsylvania;
- Nearly $165 million in wages and salaries paid; and
- Over 6,900 total jobs and $368.5 million in direct, indirect and induced economic activity from Volvo investments across the commonwealth
While many equate the name Volvo with cars, the company is heavily vested in building trucks, including the Mack brand. (Mack trucks are built only at the company’s Macungie plant near Allentown in the Lehigh Valley.)
“We share the Volvo brand with cars, but the Volvo Group is actually a leading manufacturer of trucks,” says Andrew Knight, President – Operations Americas for Volvo CE. “We have a range of brands in the truck business around the world. We also have a strong position in buses, which is clearly a growth area for the future as cities become more and more interested in sustainable transport solutions.”
Knight noted that Volvo Group is one of the top five companies to manufacture construction equipment. The company has also contributed greatly to the manufacturing supply chain network in Southcentral PA.
“Not many people realize that we are the third or fourth largest manufacturer of construction equipment in the world,” Knight said. “We do a lot of power dry systems for marine and industrial applications, and we also make our own engines – not in every category – but we are one of the largest producers of large diesel engines.”
At its Shippensburg plant in Franklin County – where major expansions have added an assembly hall, warehouse, and office building– Volvo CE builds over 50 different types of construction vehicles and employs more than 1,000 people.
With the opening in 2013 of its Americas headquarters at that location, Volvo CE’s employee base became even more diversified, which now includes engineers, sales and marketing, welders, painters and assembly personnel working there.
“The guys and girls we have on the shop floor are highly capable and able to solve problems themselves while assembling some highly sophisticated and complex pieces of equipment,” Knight said. “So we need a really good work ethic, really good training and really good attitudes towards getting a high-quality job done – and that’s what we have here. ”
The impact of employing a highly trained workforce has had a tremendous effect on the local economy, Knight added.
“In terms of labor income, we have our own direct figures ($68.6 million) and with indirect income ($89.6 million), we are contributing $158.2 million to the local economy,” Knight said. “And, of course, these people pay taxes. We’ve estimated that to be around $13.5 million. In terms of our employees at the Shippensburg plant, it is important to note that we pay 47 percent above the average local wage and 16 percent above the average wage in manufacturing for the region.”
Those figures are likely to increase as Volvo CE, Shippensburg, completes construction and opens its Customer Demonstration Center in 2015.
“We’ll be able to bring customers here, demonstrate the equipment, give presentations, show them the factory and introduce them to the people who are building their equipment and who are responsible for supporting them. They’ll have a total experience,” Knight said. “The ability to show machines to customers is a key part of the selling process…By bringing them here, we can give them confidence in our product and what we do.”
The need for a highly trained and qualified workforce is a reason Team Pennsylvania Foundation facilitated and supported the Governor’s Manufacturing Advisory Council.