Volvo is set to layoff approximately 700 employees after the New Year.
The company expects the North American truck market to be down by about 30% — 100,000 trucks — next year, Volvo spokesman John Mies wrote in an email. One of Volvo’s staple products — long-haul trucks — will represent a “significant part” of that reduction, he wrote.
“We operate in a cyclical market, and after two years of extremely high volumes, we have to adapt to reduced market demand,” he wrote.
Production workers are set to be laid off the week of Jan. 20, Mies wrote.
The news comes after a record-setting hot streak for the trucking industry.
In the 12 months leading up to October 2018, 503,500 class 8 trucks — which includes tractor-trailers — were ordered in North America, according to industry analyst group ACT Research. That shattered the previous record of 376,000 in 2006.
Employment at Volvo’s Dublin plant, meanwhile, surged from 1,700 workers in January 2017, to 2,600 in 2018 and 3,300 today.
The Roanoke Times reported in late June that Volvo expected layoffs at the Dublin plant toward the end of the year. The news from the Swedish automobile manufacturer came after it announced a $400 million investment to expand the factory over the next six years, which would increase capacity by 777 people to accommodate about 4,000 workers at its height.
To go along with the large investment, the General Assembly approved a $16.5 million state incentive package. Pulaski County also gave Volvo 221 acres of farmland adjacent the plant that it purchased in 2017 along with $500,000 that it will spend on public infrastructure improvements such as utilities and road access.
State Del. Nick Rush, R-Christiansburg, was the vice chair of the Major Employment and Investment Project Approval Commission that approved the state’s incentive package. He said Friday that the layoffs were expected.
“They are expecting less production in the short-term and more in the long-term. That’s why we approved the package,” he said Friday morning.
More than 80% of Volvo’s Dublin plant employees were laid off because of a work stoppage by United Auto Workers’ union members in late October. A Mack Trucks power train plant in Hagerstown, Maryland, that supplies engines and transmissions to the Dublin plant was part of the 3,500 UAW-represented employee strikes that affected six plants in three states. The work stoppage last just over a week.
Mies said he doesn’t know how the layoffs will last as production rates are dictated by the market. He said outplacement support meetings led by the company and UAW representatives will be provided for all affected employees. Additionally, he said employees who are laid off go on a recall list and the most senior employees are called first when rehiring takes place.
Affected employees are eligible to sign up for state unemployment benefits, and “may also be eligible for supplemental unemployment benefits according to the terms of our collective bargaining agreement,” Mies wrote.
UAW Local 2069 did not immediately respond to a request for comment Friday morning.