Workers on the assembly line at Mack Trucks’ manufacturing plant in Macungie, Pa. (Luke Sharrett/Bloomberg News)
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Output at Mack Trucks’ production facilities reached full capacity in recent days after employees returned to work following six weeks of industrial action, a spokeswoman for the Volvo Group subsidiary confirmed.
The truck maker’s facilities started to ramp up Nov. 20 after members of the United Auto Workers ratified a five-year collective bargaining agreement covering about 3,900 employees at facilities in Pennsylvania, Maryland and Florida, the spokeswoman said.
How much production was lost is not information Mack Trucks shares, she added.
But, according to S&P Global Mobility estimates, Mack Trucks’ shutdown cost it just more than 1,800 Class 8 vehicles, although analysts at the company expect the original equipment manufacturer to make up for the downtime in the coming quarters.
U.S. Class 8 truck production in the fourth quarter is expected to total 64,900 units, FTR Transportation Intelligence Chairman Eric Starks told Transport Topics on Nov. 29.
That figure is 2,000 units higher than FTR’s expectations a month or so ago, said Starks, as the strike did not last as long as the forecasting firm expected. Industrial action knocked about 2,000 units off FTR’s prognostication, he added.
Mack Trucks on Nov. 15 announced that members of the union ratified the CBA after walking out Oct. 9.
The terms of the approved master agreement matched those of a tentative contract union leaders supported but workers rejected Oct. 8.
Under those terms, unionized employees would see an average wage increase over five years of 36%, with an average immediate wage increase for all covered employees of nearly 15%.
For employees not earning the top rate, the average increase over five years would be 55%, and the average immediate wage increase would be more than 20%.
The agreement covers five facilities, including Mack Lehigh Valley Operations in Macungie, Pa. The site is a 1 million-square-foot plant with three cab assembly lines, two chassis assembly lines and a truck modification center.
Mack Trucks’ Hagerstown Powertrain Operations in Maryland, meanwhile, develops and manufactures all of the company’s heavy-duty diesel engines, transmissions and drivelines.
UAW Locals 171, 677, 1247, 2301 and 2420 in UAW Region 8 and Region 9 representing workers in Macungie and Middletown, Pa., Hagerstown, Md., and Baltimore and Jacksonville, Fla., went on strike.
Employees walked off the job at 7 a.m. Oct. 9 after voting down the tentative five-year deal. At the time, UAW members at all three big Detroit automakers also were on strike.
Between the start of the Mack Trucks walkout and ratification, the two sides met on a number of occasions, including for a stretch of four days between Oct. 23 and Oct. 26. The sides met Oct. 19 for the first time after the strike began.
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Mack Trucks and the UAW fired broadsides at one another in October, with the truck maker citing “unreasonable economic demands,” and UAW President Shawn Fain warning in a Facebook livestream Oct. 20 that the company “wanted to rearrange the deck chairs.”
By the middle of November, however, Mack Trucks had had enough and said it was willing to hire replacement workers if unionized employees fail to approve the original master contract they rejected in early October.
As a result, UAW leaders took the contract back to members for a vote Nov. 15-16, which led to the ratification.
Mack Trucks’ heavy-duty truck market share in North America through the first nine months of 2023 was 6% compared with 5.9% a year earlier, Volvo Group said in the Swedish parent company’s third-quarter 2023 earnings report.
How the strike will affect Mack Trucks’ market share in Q4 and beyond has yet to be determined.
Company leadership was, however, bemoaning lost market share even before the strike.
“Volvo and Mack have been affected by specific supply chain constraints over the year,” CEO Martin Lundstedt said during Volvo Group’s Q3 earnings call.
The supply chain constraints affected the company’s market share in North America, Lundstedt said, “which was a pity,” as the company’s rivals were unaffected by the same issues.
Mack Trucks opened its order books for 2024 in August and has since seen robust intake, Mack Trucks North America President Jonathan Randall told reporters Oct. 16 at an American Trucking Associations’ Management Conference & Exhibition news conference.
Randall said the company has noticed softening or hesitancy in some over-the-road and large fleet business but added that its core segments were performing well overall.
North American truck markets remained strong in 2023 but are expected to weaken in 2024, according to Volvo Group leadership.
“We expect our major truck markets to continue to be strong throughout this year, as we continue to deliver from our large order books to customers, but forecast lower market levels for next year,” Lundstedt said in the preface to the Q3 earnings statement.
Volvo Group expects industrywide North American heavy-duty retail truck sales to total 290,000 units in 2024, its initial forecast for the coming year.
The company expects heavy-duty retail sales this year to reach 330,000 vehicles, unchanged from its previous forecast, it said during its Q3 earnings call.
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