Volvo Construction Equipment is set to expand production capabilities in the U.S., beginning with its Shippensburg, Pennsylvania, facility. The move is part of a broader $261 million global investment aimed at increasing manufacturing resilience amid shifting tariff landscapes and global supply chain uncertainties.

As part of the upgrade, the Shippensburg plant will begin producing crawler excavators and four large wheel loader models in addition to its current output of soil and asphalt compactors and midsize wheel loaders. According to the company, the production enhancements are scheduled for completion by the first half of 2026.

The Shippensburg upgrades are just one component of Volvo CE’s global strategy. The investment will also support the company’s facilities in Changwon, South Korea, and a site in Sweden. The goal: to boost capacity, reduce dependency on any single production location, and become “less reliant on long-distance logistics.”

“This increase in production capacity means that over 50% of our North American machine supply can be built here in Shippensburg, resulting in shorter lead times while also creating opportunities for supplier growth,” said Scott Young, president and head of Volvo CE’s North America region.

The investment comes as Volvo CE works to navigate industry headwinds, including declining sales in Europe and North America. In the first quarter of 2025, the company reported an 8% year-over-year drop in global sales, totaling 21.12 billion Swedish kronor (about $2.2 billion). However, the company noted that demand in Asia and South America, along with stronger service sales and increased orders and deliveries, have helped balance performance.

“As a global company we are understandably affected by these turbulent times, but we have shown resilience in the face of uncertainty,” said Melker Jernberg, head of Volvo CE. “Our industry’s transformation may be slower than we would like, but our commitment remains strong as we continue to invest into building a better world for all.”

In addition to diversifying its manufacturing footprint, Volvo CE plans to strengthen domestic supply chains and integrate automation into its production processes. As part of this transformation, the company will also invest in worker training and skills development.

A company spokesperson confirmed that the tech integration and upskilling efforts are ongoing but did not disclose specific details about the automation technologies being deployed.

Volvo CE acquired its Shippensburg plant from Ingersoll Rand in 2007 and made it the company’s North American headquarters in 2012. In addition to the current expansion, Volvo CE has committed to investing another $40 million in the central Pennsylvania region over the next five years, further reinforcing its long-term presence in the U.S.

Originally reported by Nathen Owens in Manufacturing Dive.