New labor deal gives Volvo production flexibility

GREENSBORO, N.C., (Jan. 29) — Workers at Volvo Trucks North America’s New River Valley assembly plant in Dublin, Va., have ratified a six-year labor contract, seen as the first step toward a $148 million US expansion that would boost output there to 50,000 trucks a year.

Production and maintenance workers represented by the United Auto Workers voted yesterday in favor of the new deal by a margin of 1253 to 562. Salaried workers approved a separate agreement on Jan. 17. Both agreements take effect Feb. 1, 1999.

The six-year contracts are the longest of their kind in the North American heavy-truck manufacturing business, Volvo said. All workers will receive annual increases in base wages and cost-of-living increases totaling 18% over the life of the agreement. Production and maintenance workers will receive improved pension and other benefits as well.

The deal allows Volvo to use a work scheduling concept called Quattro. The new work schedule in combination with added overtime flexibility would allow production of an additional 1500 trucks annually using a one-shift assembly operation, the company said.

Volvo said the agreement with the UAW was one prerequisite for the expansion, the other being economic assistance from state and local governments.

Virginia legislators are considering an economic development plan; Volvo Trucks would not comment until the legislation is passed. However, is it expected that the total of the performance-based incentives will be approximately $60 million over ten years.

Work to expand the one-million-square-foot plant is scheduled to begin later this year.