November 22, 2016 11:00 AM, EST

Volvo Plans to Divest Part of Business That Includes Mack Defense

Mack Trucks

The parent company of Mack Trucks is planning to unload its governmental sales business area, which includes a North American defense division that is headquartered in Upper Macungie Township, Pennsylvania.

"Governmental sales has built a very strong position over the last few years with a positive development and a record order book," Deputy CEO Jan Gurander said earlier this month. "There are great opportunities to grow the business even further; however, we believe that a new owner may be better placed to take the business to the next level.

"Consequently, we intend to start preparations to divest the business."

The governmental sales business makes up about 1.5% of Volvo's total sales. The business also has about 1,300 employees, most of whom are in France.

But governmental sales also includes Mack Defense, which is headquartered in Upper Macungie. While Mack Defense is a wholly owned subsidiary of Mack Trucks Inc., it also is part of Volvo's governmental sales business area, spokesman Christopher Heffner confirmed.

"At this early stage in the process, we cannot comment on the exact scope of the intended divestment or whether or not it may impact Mack Defense," said Heffner, who declined to disclose the number of Mack Defense employees for competitive reasons.

He did say, however, that employees at Mack Defense's headquarters in Upper Macungie manage defense engineering, contracting, purchasing, project management and finance activities. Its executive team also is based there.

According to its website, Mack Defense also has a regional office in Washington, D.C., a remanufacturing facility in Middletown, Dauphin County, and assembles its military commercial-off-the-shelf trucks and its U.S. General Services Administration products at the Mack Trucks plant in Lower Macungie Township.

Mack Trucks employs about 1,480 people in the Lehigh Valley.

In July 2015, Mack Defense won two contracts to provide standard military pattern trucks and equipment to the Canadian Armed Forces. The contracts, which have a combined value of $560 million in U.S. dollars, call for Mack to deliver more than 1,500 8x8 trucks, 300 trailers and 150 armor protection systems for the vehicles, with deliveries slated to begin in the summer.

System assembly for those contracts, however, is taking place in Sainte-Claire, Quebec.

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