Volvo, Union Reach Tentative Deal on New Five-Year Labor Contract
Transport Topics Staff
This story appears in the March 28 print edition of Transport Topics.
Volvo Trucks North America and the United Auto Workers said they reached a tentative agreement on a new five-year contract for workers at the heavy-duty New River Valley plant near Dublin, Va.
The parent company in Sweden also released its 2010 annual report that documents how Volvo AB’s truck division led the corporation in a turnaround to profitability from a 2009 loss.
“Yes, we reached a tentative agreement with Volvo Trucks that would be for five years and cover some 1,300 of our members at New River Valley, if it’s ratified and signed,” Lester Hancock, president of UAW Local No. 2069, Dublin, Va., told Transport Topics.
Hancock said the workers were scheduled to vote on ratification by secret ballot beginning on March 27.
VTNA said its New River Valley facility has 1.6 million square feet of space on nearly 300 acres and is the parent company’s largest truck manufacturing plant in the world.
VTNA sells only Class 8 trucks in North America and workers build the VN and VHD models in Dublin.
“The terms of the contract can’t be disclosed by either side until the vote,” Hancock said. “The local union also won’t disclose whether we are recommending its approval or not.”
Hancock said that if union members approve the pact, it would be ratified within days. He said the most recent contract expired March 16. That three-year deal was signed following a 42-day strike in early 2008, he said.
A VTNA spokesman said a 24-hour extension after the expiration date helped lead to the new proposal. VTNA and its sister company Mack Trucks make their North American diesel truck engines in Hagerstown, Md. Workers at that plant are not covered by this contract.
Meanwhile, in assessing its 2010 truck business, the Volvo report said, “2010 was characterized by a recovery in demand in Volvo Group’s mature markets and continued strong growth in the emerging markets. During the year, order intake in Europe and North America increased successively from low initial levels. The Japanese market grew during the first half of the year and then stumbled after the government incentive program for investments in new trucks ceased. Throughout the year, demand remained strong in many emerging markets, including Brazil and India.”
The report was published March 16 and said combined sales for Volvo, Gothenburg, Sweden, rose 28.6% to the equivalent of $36.75 billion last year from $28.57 billion in 2009. Volvo reports its financial results in Swedish kronor.
Corporate net income was $1.56 billion last year following Volvo’s loss of $1.92 billion in 2009.
Sales for the global truck group increased to the equivalent of $23.23 billion, or 27.8% more than the $18.18 billion in 2009. Truck operating profits were $1.4 billion, compared with a 2009 loss of $1.41 billion.
Volvo makes trucks internationally through operating companies Volvo Trucks, Mack Trucks, Renault Trucks, UD Trucks and VE Commercial Vehicles, a joint venture with Eicher Motors.
Volumes increased for all operating companies and in all major geographic markets.
In 2010, truck revenue was 63.2% of the group’s total and its profits were 89.7% of the total.
Volvo Group’s other divisions make buses, construction equipment, marine engines and aerospace components. The corporation also has a financial services company.
