The Skyland Volvo plant will shut down on March 31, 2010, according to a press release from the Stockholm-based company. An estimated 228 employees will lose their jobs in a facility that Buncombe County and the city of Asheville were considering for millions in grants just a few years ago.
“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 reads. “As a result, the company’s Asheville, NC, USA manufacturing facility will stop its activities by 31st March 2010. The closing will affect 228 employees.”
The plant built excavators, and demand has declined drastically for the heavy equipment as the construction market has tanked, and the company’s industrial consolidation means that over 200 manufacturing workers are facing tough times. Production previously handled at the Asheville plant will shift to plants Sweden, South Korea and Pennsylvania. Volvo’s Biltmore Park corporate offices and Volvo Rents are unaffected by the closure.
Back in 2006 and 2007, however, local governments were ready to give Volvo a combined millions in development grants. The Buncombe County Board of Commissioners voted to give the company $4 million over 10 years, and Asheville City Council voted to chip in $599,200.
In 2006, then-Chair Nathan Ramsey and Commissioner Carole Peterson posed beside freshly built excavators, while the city’s then-Economic Development Director, Sam Powers, said the incentive package “also ensures that the Volvo project will not leave the area.”
However, according to an announcement from the local Economic Development Coalition of Asheville-Buncombe, the money was never spent, as Volvo didn’t meet the necessary requirements.
“They [Volvo] didn’t ever meet our criteria, and we don’t give out a dime until a company does,” Clerk to the Board Kathy Hughes tells Xpress.
Today, the EDC’s announcement focused on its efforts to ensure Volvo’s workforce a soft landing, and get 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 Chair David Gantt says in the announcement.
According to the EDC, they’ll now help Volvo’s laid-off workers to find employment opportunities with other manufacturers or additional training as needed. EDC Executive Director Ben Teague notes that while Volvo may be gone, maybe there’s opportunity for another company to take over the plant.
“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 are available in this space,” Teague declares in the announcement.
— David Forbes, staff writer
This is not good news at all for the whole community. A plant of that size could easily adversely impact the surrounding community with $100M per year of lost economic value. Employees, suppliers, contractors, tax revenues and empty real estate all drive home the importance of economic development.
proves once again the effectiveness of bailouts just to “save jobs”, especially for a business producing cars too expensive for anyone to buy. bring the tata nano to asheville.
I suppose there weren’t any backroom deals made for Volvo.
There is no Unity in United States.
We all shrug our shoulders in that self centered way.
“doest effect me ” or “I don’t care!”
WAKE UP AMERICA!!!!!!!!!!!!!!!!
There was no “bailout” of the Volvo plant and they don’t make cars in the facility that is closing.
Perhaps they could take the $4.6 million and reinvest it into the community with something that creates 228 or more new jobs. I’m not a business genius or anything but I’d have to think that $4.6 million could go a long way towards something more useful than another statue or park in Buncombe County or Asheville in these economic times.
Perhaps they could find a better use for the 4.6 million dollars such as creating 228 new jobs. Asheville should have recognized the trend of industry leaving the area 20 years ago. I’ve watched factory after factory close and never saw a single finger lifted to bring any new industry into town to replace what was lost. What I have seen is a lot of effort placed on the tourist industry to make up for the lost jobs instead. When I was a kid growing up here, people had jobs…real jobs, producing everthing from baby food to blankets. Local govt. paid it’s bills with the taxes from these businesses and everything made from the tourist industry was just icing on the cake. Buncombe Co./Asheville has placed all of it’s eggs in one basket with tourism. Yes, it does generate a lot of money for the area but all of the money collected is based on the whims of whether someone wants to come here or not. If it’s a bad leaf season or people can’t afford to come visit the Biltmore Estate again this year then the money has to come from somewhere and guess where that money comes from…that’s right, out of your pocket. Ugh…
you’re right. i read that wrong. the money was never spent. thankfully. we need to start building cheaper cars. and making other things while we’re at it.
Car prices and car payments are one of American’s biggest personal financial issues/problems. We’re spending way more than we used to on cars … we spend lots more on lots of things than we used to. Technology products especially. How much can our debt to income ratio take?
A lot of people have fallen for the status craze of leasing what they cannot possibly afford to purchase outright. Auto leases have fueled the sticker shock that everybody encounters when looking at a new car purchase. The lease allows the consumer to walk away thinking he or she can have the latest Volvo, BMW or DB product on the lot.
JWT, you are absolutely right. Just consider how much the average household now spends on entertainment technology i.e. cable, internet, cell phones. Add in the highend leases and a lot of us are living on the edge and foolishly.
Leasing is a disaster for most. No one/very few know how to do the math to determine how good/bad/terrible of a deal they got. If the dealership pushes it that hard, it can’t be good for you.
America used to pay cash for cars. Then 3 year loans, then 5, now 7. You are always upside down on the loan. You own nothing.
Rolling debt from an old car into a new loan is the worst financing decision ever. Do that a few times and you owe 2x what the car is worth.
Old bank rules used to be 28% for your house and 36% for all debt including the house. That leaves 8%. We are so far over that its crazy. Those historic numbers were relevant in that if you exceeded them, that you got in cash flow trouble.
The lending rules need to be tightened and not loosened. For our own good.
“Perhaps they could take the $4.6 million and reinvest it into the community with something that creates 228 or more new jobs. I’m not a business genius or anything but I’d have to think that $4.6 million could go a long way towards something more useful than another statue or park in Buncombe County or Asheville in these economic times.”
AMEN To that, but the Council cares more about how many breweries and worthless rust art it squander money then jobs. If it was a Brewery or some lame Coffee Shop the council would be up in arms and the MX would be beside itself.
BUT REAL JOBS that bring income and BENIFITS according to what the MX portrays isnt needed, we need more low wage coffee shops or tips, that will save the Asheville economy.
I agree lending rules need to stay tightened. It was Comgressional tinkering with the economics of risk that fueled the high risk mortgage market leading to the credit crunch of the past year. Unfortunately, the same idiots are still running the show.
Dweller, Asheville City Council is going to fix that business problem by going for the legislated “living wage”.
When you have a service based economy then what happens when the waiters/waitresses quit going out to eat???
“When you have a service based economy then what happens when the waiters/waitresses quit going out to eat???”
Thank you . . .
Trav – I agree that lowering the FNMA rules had an impact. However, not all lenders had to ‘go that low’. They chose to and the borrowers chose to as well.
Financing computers, furniture and all the other things that Americans finance thru GE or their credit cards … in addition to cars … demonstrates that as a society, we are still making very bad decisions and will pay the dire price sooner or later.
The Gov’t wanting us to borrow more to stimulate the economy is riding a fine line. The economy will come around eventually, but politics and politicians can’t afford to wait and are willing to take us to the cliff’s very edge to get reelected.