Mack to lay off 450 workers in '07 market downturn

| Friday, October 20, 2006

A downturn in the new truck market is being caused by stricter and more costly 2007 environmental standards, according to a major manufacturer.

Officials with Mack Trucks announced Friday, Oct. 20, that the company will lay off 450 people from its workforce at the Macungie, PA, assembly plant. The plant employs 1,040 people.

In a press release, company officials said the first cuts will happen before the end of this year, with additional cuts throughout the first half of 2007.

Mack President and CEO Paul L. Vikner said the reductions were "essential to the responsible management of our business through the downturn."

The Environmental Protection Agency has, in its effort to reduce greenhouse gas emissions, required 2007 model year trucks to be equipped with new filtration and exhaust systems.

The new equipment has added a cost of several thousand dollars to new trucks, which has caused a "pre-buy" ahead of the new requirements. Truck manufacturers reported strong sales in 2005 and the first three quarters of 2006, but, as Mack has shown with its latest announcement, the recent sales run is coming to an end.

Mack is owned by the Volvo Group of Sweden.

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