Mack and Volvo Trucks launch North American optimization plan

Mack and Volvo Trucks launch North American optimization plan 

Mack Trucks and Volvo Trucks North America have jointly formulated a plan for
increasing the efficiency of their North American operations. The plan includes
the relocation of Mack's head office from Allentown Pennsylvania, to Greensboro
in North Carolina, and a concentration of Mack's truck production to the plant
in Macungie, Pennsylvania. Implementation of the plan would mean that the Volvo
Group would incur an estimated restructuring cost of approximately USD 60
million. The restructuring cost is expected to be recorded during the second
half of 2008. 


The aim of the plan is to increase the effectiveness and efficiency of the North
American truck operations and also to create better conditions for capitalizing
on the opportunities arising in the North American market. The plan includes:

• Moving Mack's headquarters and all support functions, including product
planning, product development and purchasing, from Allentown to Greensboro,
North Carolina, where many of the Volvo Group's North American support functions
are already concentrated.

• Transferring assembly of Mack highway vehicles from the plant in Virginia's
New River Valley to the plant in Macungie, Pennsylvania, where Mack's
construction and refuse vehicles are already assembled. After the transfer, all
production of Mack and Volvo trucks will be concentrated to a single factory for
each brand 

• Restructuring of the parts distribution network that currently serves all
business areas in the North American market. The new organization will improve
the network's competitiveness and provide better service to dealers and
customers across North America.

In conjunction with this restructuring, an investment of about USD 50 million is
planned to install a new engine block machining line at the Hagerstown, Maryland
powertrain facility. This line would complement the Group's global capacity in
the engine field, and reduce logistics costs and exposure to currency
fluctuations.  

The transfer of Mack's vehicle production from New River Valley is planned for
the fourth quarter of 2008. The movement of the Mack headquarters and support
functions is estimated to take place over the course of 2009, while the
consolidation of product development and purchasing will take place in 2010. 
Restructuring of the parts distribution network will begin in 2009 and is
expected to be completed in full by the end of 2010. The new Hagerstown block
line is planned to be operational by the end of 2010.

The impact on employees represented by the United Auto Workers (UAW) will be
subject to negotiations with the union; however, the company intends to offer
all affected employees positions in other locations. Mack and the UAW have
agreed that negotiations on a new labor contract will resume on September 2,
2008.

August 14, 2008

For more information, please contact:

Media Relations: 				
Volvo Group				
Mårten Wikforss				
+46 31 66 11 27 or 			
+46 705 59 11 49				 

Volvo Truck Corporation			
Tommy Kohle
+46 31 66 65 17 or
+46 706 76 65 17

Mack Trucks
John Mies
+1 336 393 43 00 or
+1 336 255 25 21


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AB Volvo (publ) may be required to disclose the information provided herein
pursuant to the Securities Markets Act. The information was submitted for
publication at 16.00 p.m. CET August 14, 2008.


The Volvo Group is one of the world's leading manufacturers of trucks, buses and
construction equipment, drive systems for marine and industrial applications,
aerospace components and services. The Group also provides complete solutions
for financing and service. The Volvo Group, which employs about 100,000 people,
has production facilities in 19 countries and sells their products in more than
180 markets. Annual sales of the Volvo Group amount to about SEK 285 billion.
The Volvo Group is a publicly-held company headquartered in Göteborg, Sweden.
Volvo shares are listed on OMX Nordic Exchange Stockholm.