SHIPPENSBURG, PA — Volvo Construction Equipment (Volvo CE) is significantly expanding its U.S. footprint, resulting in more than 50 percent of its North American machine supply being produced at its Shippensburg, Pennsylvania, facility. Less than a year after announcing plans to localize more machine assembly, the company is delivering its first American-built excavators and larger wheel loaders to customers. A total of 11 additional models will be produced in Shippensburg, shortening customer lead times by more than six weeks.
The company marked the milestone with an event attended by legislators and business and industry leaders. They got an inside look at the manufacturing transformation and Volvo CE’s ongoing efforts to develop a localized supplier base.
“What you see today is manufacturing resilience in action: adapting with purpose and speed to increase capacity and build more machines closer to our customers," said Scott Young, Head of Region North America, Volvo CE. "This achievement advances Volvo CE’s long-term strategy to strengthen stability and flexibility across the North American market while supporting our employees and the regional economy.”
The expansion brings Volvo CE's North American production portfolio to 30 machine models, including excavators, wheel loaders, and compactors. With the most recent investment of $40 million, Volvo CE has invested over $1.4 billion since 2007 to triple its annual output capacity and build workforce skills to support growth and increased digitalization.
Volvo CE acquired the site and its road development division from Ingersoll Rand in 2007 and established its North American headquarters there in 2012. Currently, over 750 people are employed at the location.
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“Volvo CE has taken seriously its commitment to investing in and revitalizing American manufacturing," Congressman John Joyce, M.D., said. "This facility right here in Shippensburg is not only building world-class construction equipment; it is creating opportunities for families and workers throughout our community. Pennsylvania has always been a strong contributor to our nation’s manufacturing strategy, and this expansion is proof that we will continue to be a leader in its future.”
While Volvo CE has made major strides to expand its North American capabilities, building a stronger local supply chain to support has been incremental and is one of the most critical opportunities — and challenges — for Volvo CE and the equipment manufacturing industry.
“Strong, mutually beneficial supplier relationships have been fundamental to how Volvo CE works with its suppliers for decades," said Todd Papple, Head of Purchasing Americas, Volvo CE. "But increasingly, success requires a broader ecosystem — where businesses, economic development organizations, and communities work together."
At the event, Volvo CE announced its ambition to grow its business with Pennsylvania-based suppliers by 30 percent by 2030.
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To support this initiative, Volvo CE partnered with the Franklin County Area Development Corporation to support a global excavator counterweight supplier's decision to land a regional operation. The supplier is investing more than $1.5 million in a local facility, creating jobs to complete and deliver counterweights directly to the Shippensburg plant on a just-in-time basis.
By building greater flexibility into its operations, Volvo CE is better positioned to navigate geopolitical dynamics and the cyclical nature of the construction equipment industry.
The company increased production capacity through automation, process improvements, and more efficient use of existing factory space, enabling growth while maintaining its existing manufacturing space and workforce.
The plant's combined 436,000-square-foot assembly and fabrication footprint was reengineered creating three flexible production lines capable of building the full range of excavator, wheel loader, and compactor models while adding new excavator welding capacity.
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To upskill its existing workforce, Volvo CE invested in extensive onsite and offsite training with sister factories in Sweden, Korea, and Brazil, equipping employees with new technical skills and expertise. In total, employees completed more than 180 hours of individual training while gaining cross-cultural experiences.
The North American site is also pioneering a new “utility specialist” approach for production of large wheel loaders, which require 30 percent more parts and complexity to build on the same line. Employees were cross trained in multiple zones to provide additional support at stations requiring extra labor, helping maintain a steady workflow. Innovation and insights from the pilot can be applied to the excavator line and shared across Volvo CE sites worldwide.
“Over the past 11 months, our teams have demonstrated exceptional commitment and execution to expand our production capabilities here in Shippensburg," said Gustavo Casagrandi, Head of Operations, Volvo CE Shippensburg. "Along the way, we’ve developed new technical capabilities within our workforce, making us more resilient and competitive as a manufacturing facility,”
The Shippensburg-based technology team is also evolving from a single-product focus to a more flexible operating model, deploying resources where they are needed most across the product portfolio.
