news-record.com

GREENSBORO -- Mack Trucks Inc. will relocate its headquarters and some support functions to Greensboro, creating 493 jobs here and investing $17.7 million during the next three years.

The move is part of a restructuring for Mack Trucks and Volvo Trucks North America, which already has its headquarters in Greensboro. Both are part of the Sweden-based Volvo Group, the world's second-largest producer of heavy-duty trucks.

Mack Trucks' headquarters is currently located in Allentown, Pa., as are support functions such as information technology, parts logistics, product development and purchasing that serve both Mack and Volvo Trucks North America, according to a news release.

Relocating Mack Trucks' headquarters and those support functions closer to the Volvo headquarters in Greensboro should boost the competitiveness of the two companies and improve efficiency, the release states.

The restructuring, which is expected to start later this year and continue through 2010, will result in 493 new jobs in the area that will pay an average annual salary of more than $73,800 not including benefits.

"The city of Greensboro and the state of North Carolina have been great partners to the Volvo Group for a number of years," said Mack Trucks Inc. President and CEO Dennis R. Slagle. "Mack looks forward to continuing that partnership, and making a positive contribution to the area's economy and community."

Specifics about where the facility would be located in Greensboro was not stated in the release.

About 20 percent of the company's employees are expected to relocate to Greensboro from Allentown, with others being hired locally and from around the country for the new headquarters, said Dan Lynch, president of the Greensboro Economic Development Alliance, which assisted in recruiting Mack.

Lynch, who said this is a big announcement for Greensboro, which has had a good relationship with Volvo for years, pointed out also that "Mack Truck is a very important company to Allentown, Pennsylvania, so we're trying to be very sensitive to the fact that they'll be losing that. We've been on that side of the coin a couple of times."

In addition to losing many textile companies in the past decade, Greensboro lost the headquarters of Jefferson-Pilot Corp., one of the city's most prominent corporations, when it was bought by Lincoln National Corp. two years ago. That change has actually resulted in a net gain of jobs, however, as Lincoln moved more functions to Greensboro.

Lynch said that state and Volvo officials contacted him about a month ago to let him know about the move, and the company decided not to seek local incentives because the public incentive process would make it impossible for the move to remain secret.

The company has been approved by the state for a Job Development Investment Grant.

For each year that Mack Trucks meets the required performance targets, the state will provide a grant equal to 60 percent of the state personal income withholding taxes derived from the creation of new jobs. Should the company create the jobs called for under the agreement and sustain them for nine years, the agreement could yield as much as $8.5 million for Mack Trucks.

In addition, the grant could provide up to $2.8 million to the Industrial Development Fund for infrastructure improvements in economically distressed counties. When a Job Development Investment Grant is awarded to one of the state's most economically prosperous counties such as Guilford, it results in 25 percent of the grant award being allocated to the Industrial Development Fund to encourage economic development in less prosperous areas.

As part of the restructuring, the company will transfer assembly of Mack highway vehicles from the plant in Virginia's New River Valley to the plant in Macungie, Pa., 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.

In addition to the well-paying professional jobs for Greensboro, the Mack relocation could have an impact on passenger traffic at Piedmont Triad International Airport, which has suffered declines in recent years due to discount airline competition from Raleigh-Durham and Charlotte.

"That was one of the first things that I thought about was the positive impact that this will have on the airport," Lynch said. Mack's "corporate headquarters, its design team, their information technology group - these are folks that travel to professional conferences and travel to their clients and suppliers around the world."

They also have the discretionary income to travel more for leisure as well, he said.