The Volvo Construction Equipment plant in Skyland will shut down March 31, 2010, according to a Dec. 11 press release from the Stockholm-based company. An estimated 228 employees will lose their jobs in a facility that both Buncombe County and the city of Asheville had earmarked for millions in economic-incentive grants just a few years ago.
Later the same day, Volvo announced it will immediately cut 50 jobs from its Asheville sales force.
"In a move to improve the competitiveness and overall industrial efficiency of Volvo Construction Equipment, the company has decided to consolidate its North American industrial operations by removing excess industrial capacity in the Americas," the release states.
Demand for the excavators manufactured at the plant, and for heavy equipment in general, has declined drastically as the construction market has tanked. Production previously handled at the Asheville plant will shift to factories in Sweden, South Korea and Pennsylvania. The closure does not affect Volvo Rents heavy-equipment rental unit.
As recently as 2006 and 2007, however, local governments were prepared to award Volvo millions in development grants. The Buncombe County Board of Commissioners approved a $4 million grant over 10 years, and the Asheville City Council agreed to chip in an additional $599,200.
In 2006, then board Chair Nathan Ramsey and Commissioner Carol Peterson posed beside freshly built excavators, and Sam Powers, the city's economic-development director, said the incentive package "also ensures that the Volvo project will not leave the area."
According to an announcement from the Economic Development Coalition for Asheville-Buncombe County, however, the money was never spent, because the company didn't satisfy the necessary requirements.
"They didn't ever meet our criteria, and we don't give out a dime until a company does," Clerk to the Board Kathy Hughes told Xpress.
The EDC's announcement focuses on the coalition's efforts to ensure a soft landing for Volvo's local work force and to place another company in the plant as soon as possible.
"What is important now is how our community can pull together to support these families and help them find new jobs here in Buncombe County," Board of Commissioners Chair David Gantt says in the announcement.
The EDC says it will help Volvo's laid-off workers find other manufacturing jobs and/or additional training as needed. And Executive Director Ben Teague emphasizes the opportunity the vacant plant might represent for another company.
"A facility of this size, with these amenities, is an extremely attractive piece of property to manufacturers. A well-cared-for facility, the possibility of rail service, ease of access from major highways, and the designation as a foreign trade zone are all assets that manufacturers look for and [that] are available in this space," Teague notes in the announcement.
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