Courtesy Volvo CE "We want to have the flexibility to scale according to customer demand," Olney says.
Pat Olney, chief executive and president of Volvo Construction Equipment, is currently overseeing a $100-million investment in the heavy-equipment maker's North American operations. This push includes a $30-million expansion of the Sweden-based conglomerate's Shippensburg, Pa., facility, which will serve as the North American business and manufacturing hub. Olney, a Canadian by birth, is based at Volvo CE's offices in Brussels. His Sept. 22 interview with ENR at Volvo CE's Shippensburg facility has been condensed and edited.
ENR: What is the time line for the expansion of the Shippensburg facility?
Olney: The initial investment in the demo center and training center is happening over the next 16 months. Consolidation of the [Asheville, N.C.] sales office is timed for late next year. Then, over a series of three to four years—step by step, phase by phase—we bring the products here, finishing around the end of 2014, early 2015.
With the expansion of the Shippensburg facility and the introduction of new equipment models, are you looking toward longer-term growth?
Well, I'd say it this way: We're always going to size our operations to what customer demand is at that point in time, but like in all the other markets, we want to have the flexibility to scale according to customer demand. I don't know what the three-, four- or five-year future of this market is. There are some scenarios where it could get quite busy again, and there are scenarios where it [could] bump along.
Like many global equipment makers, Volvo CE has seen its North American market diminish relative to other global markets in recent years. Do you expect this to change?
I think it has the potential to do that, and that is because infrastructure is so underfunded in this country that there is a lot of work to be done. We know that. We know there is a tremendous amount of work that can be done on roads and bridges, for example. Infrastructure, I think, is linked to economic competitiveness, so the key question there is based on the government's ability to find financing solutions, not only for infrastructure but for the whole budget.
In what construction sectors are you seeing the most growth?
Basically, it's heavy construction. But if we're talking globally—and I'm not necessarily an expert on submarkets—but it's heavy construction, mining-related and commodities-related activities. Some markets we've seen infrastructure investment driving quite a bit. Of course, housing is not driving. Looking at our segments of growth in this country, [investment] is not driving a lot of light construction work. So it's heavy construction, mining work, oil and gas.
Volvo CE recently has seen growth in its operations in China. How much of that can be attributed to your acquisition of China-based heavy-equipment maker SDLG?