Photos by Justin Cook | The Roanoke Times

The Intermet facility in Radford has announced that it is filing for Chapter 11 bankruptcy protection. The move follows what the company called a steady decline in automotive sales, which has reduced the demand for the vehicle parts made at the company's New River Foundry.

The Volvo plant in Dublin will no longer produce Mack trucks, the company said Thursday. Although the Dublin facility will continue to make Volvo trucks, company officials said they didn't know what effect the move would have on the work force.

DUBLIN -- Sweden-based Volvo Group dropped unwelcome economic news on the New River Valley on Thursday with plans to trim production at its heavy-duty truck plant in Dublin.

Executives with the global auto and truck maker said they are moving production of Mack trucks from Dublin to Pennsylvania in a streamlining measure aimed at making the company more profitable.

Volvo Trucks North America, which manufactures both brands, did not announce any job reductions in Dublin but said a cut in the 1,400-person production work force is a possibility when the change occurs during the last three months of the year. The plant's workers have been buffeted by multiple layoffs and expansions over the years.

Thursday, workers exiting the sprawling factory included one man who said shifting work to a Macungie, Pa., plant bodes poorly for the Dublin work force, especially those hoping to be recalled from layoffs in May.

"I know it helps them up in Macungie, but it's hurting us," Danny Talbert said at a fruit stand outside the gate of the 34-year-old factory.

In contrast, Volvo employee Al Blankenship, who helps run the fruit stand as a side job, said the departure of the Mack line could free up opportunity to make more Volvo-branded trucks here.

"I think it'll be good for both companies," Blankenship said. "I don't know about people on layoff, but hopefully it'll bring some more orders and get some more jobs."

The Mack line currently accounts for almost one in three vehicles assembled in Dublin. Daily output is 24 Macks and 56 Volvos, Mack Trucks spokesman John Mies said.

Asked about the potential for job loss, he said if the Mack pullout were implemented immediately, the company would eliminate at least 200 jobs in Dublin.

On the other hand, Mies said that if the demand for Volvo trucks happens to rebound in the fourth quarter for reasons such as an improving economy, the plant could conceivably absorb the loss of the Mack production line without cutting its work force. In that case, the effect would be fewer recalls of the 900-some production workers who were laid off earlier.

The actual job effects, if any, will reflect market conditions at year's end, Mies said.

Lester Hancock, president of United Auto Workers Local 2069, said the union is looking for more specifics to try to assess the effects of the new strategy.

"We're on a fact-finding mission right now," he said.

The streamlining was announced in spite of Volvo Group posting record profits. Companywide truck operating profits were up 26 percent during the recently finished second quarter over the year-ago period, a July financial report said.

Mies said the company has profited in the European market, but in North America, "we're not satisfied with our current level of competitiveness, and this restructuring plan is to address that."

Volvo is also moving its Mack Trucks headquarters from Pennsylvania to Greensboro, N.C., restructuring parts distribution and investing in an engine block machining line in Maryland. The cost of the plan is an estimated $60 million.

Volvo saw its U.S. truck deliveries swell to 37,000 vehicles in 2006, a record, and then fall to 17,000 vehicles in 2007, Mies said. He said executives expect 2008 deliveries to come in at about the same level as 2007. All Volvo trucks are made in Dublin.

Valley business leaders had a mixed reaction.

"I think it's a positive thing from the standpoint of Volvo," said Peggy White, who directs the Pulaski County Chamber of Commerce. "By narrowing down they can focus on one line and make that one line superior. It's an opportunity to strengthen their Volvo products."

Aric Bopp, who directs the New River Valley Economic Development Alliance, was somewhat disappointed by Thursday's announcement. But he expressed confidence that Volvo will continue to be a strong area employer.

"We look forward to a long-term relationship. We look forward to them continuing to employ a lot of our citizens," he said.

The fortunes of Virginia as a whole are tied in some ways to the Dublin plant. In 1999, then-Gov. Jim Gilmore announced a $145 million expansion at the factory paid for in part by $54 million in state incentives. Employment rose into the thousands in the following years.

Christie Miller, spokeswoman for the Virginia Economic Development Partnership, downplayed Thursday's announcement as a brand consolidation.

"There is no indication that Volvo is shutting down the New River Valley plant. The company is committed to the New River Valley. They are just consolidating the Mack brand," she said.

One area company said the move will not likely affect it.

Metalsa Roanoke, a Botetourt County maker of truck rails, is already supplying rails to the Volvo plant in Macungie. As Volvo moves the Mack line, it appears Metalsa can simply deliver rails that would have gone to Dublin up to Macungie, said Steve Helgeson, vice president for business development and customer service.

"There's no direct impact on our operation," he said.

Staff writers Duncan Adams, Jenny Kincaid Boone, Kevin Litten and Amy Matzke contributed to this report.