WASHINGTON — Mack Trucks Inc. announced Saturday that it will eliminate many of the 3,000 jobs at its Hagerstown, Md., engine plant and close its Allentown, Pa., operation to build a new assembly plant elsewhere.
The moves could mean not only the loss of about 1,000 jobs in Hagerstown in coming months, but also that the company would close the Maryland plant and consolidate its manufacturing operations at the new assembly plant within a few years, company and union sources said.
Company sources said the new $80-million plant will be built in the South--probably in North Carolina or South Carolina.
Wage Cuts Sought
Mack has been demanding substantial cuts in wages and benefits from the United Auto Workers, and the company said it was making the moves because the UAW had not offered Mack sufficient cost savings during weeks of negotiations.
The UAW, arguing that Mack was still a profitable enterprise, had refused wage and benefit cuts. Instead, the union offered to divert roughly $1 an hour in wages into a fund to help Mack modernize, saying it could save the company $50 million a year by agreeing to changes in work rules and productivity improvements.
But Mack Chairman John B. Curcio said Saturday that the union's cost-saving claims were exaggerated and could not match the savings that Mack plans to achieve by relocating from Pennsylvania and using outside sources to supply parts more cheaply.
Mack officials have said privately that the assembly plant in Allentown is expected to close in 1987, when the new assembly plant comes on line. The move would eliminate 2,000 jobs in Allentown.
Jobs in Jeopardy
The officials also have said they plan to eliminate about 1,000 jobs in coming months by purchasing transmission parts at an outside supplier instead of making them in Hagerstown.
Moreover, if Mack builds its new plant in North Carolina or South Carolina, the Hagerstown facility would no longer be a three-hour drive from the assembly plant and would probably be closed eventually, company sources said.
"This will be a bad move for the company," said Ronald L. Bowers, president of the Board of Commissioners in Washington County, Md., where Mack is the largest employer. Bowers, a 24-year Mack employee, said that out-sourcing "will not improve their product or decrease their costs."
Bowers said Mack has been an "integrated" company for its 85-year history, producing virtually all its own parts and building a reputation for quality, embodied in the slogan "Built Like a Mack Truck," Bowers said. "They'll have a hard time finding . . . the same work ethic."
According to the union, the company demanded last month a seven-year contract cutting the average hourly wage from $13 to $9.15.