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Mack Trucks moving from Allentown, Pa.

August 14, 2008 9:18:58 PM PDT
Heavy-duty truck maker Mack Trucks Inc. will move its Allentown, Pa. headquarters to North Carolina as part of a restructuring that could cost Pennsylvania as many as 600 jobs.

The headquarters' move to Greensboro is scheduled for next year. Mack also plans, later this year, to shift assembly of highway vehicles from Virginia's New River Valley plant to the Mack plant in Macungie, Pa. The move is expected to add about 200 blue-collar jobs in Pennsylvania, helping offset some of the loss of office jobs.

Mack currently employs about 1,500 in Pennsylvania's Lehigh Valley, including 680 at its headquarters. Total employment in the state should total at least 900 after the restructuring, said John Mies, Mack vice president of communications.

The company is also converting a test center in Allentown into a customer demonstration and reception center.

In addition, Mack will close warehouses in Columbus, Ohio, and Dallas and will downsize facilities in Baltimore, Chicago, Jacksonville and Memphis.

The headquarters move allows Mack Trucks to join fellow Volvo Group subsidiary Volvo Trucks North America in Greensboro. Sweden-based Volvo Group is the second-largest producer of heavy trucks. Many of Mack's support functions, including information technology, human resources and finance, are already stationed in Greensboro.

In addition, the company will consolidate in Greensboro some functions now handled in Allentown. The company also will restructure its parts distribution network and create a new Volvo Group North America central warehouse in a location that's not yet determined.

"Taking these steps will make us a more efficient, agile and cost-effective organization in almost every aspect of our business, from product development to production to aftermarket support," said Mack president and chief executive Dennis R. Slagle.

Many of Mack's support functions, including information technology, human resources and finance, are already stationed in Greensboro.

The company said it plans to offer all affected members of the United Auto Workers positions in other locations. The UAW and Mack will begin negotiating a new labor contract on Sept. 2. The company will offer relocation opportunities to workers not in the UAW.

Severance pay and job assistance will be provided to any worker who stays through the transition but then leaves the company.

North Carolina is providing a Job Development Investment Grant that could provide Mack Trucks $8.5 million in benefits if it creates its promised jobs and sustains them for nine years.

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