Volvo has wanted an American car factory for decades. But complications and setbacks have gotten in the way -- including an entire decade spent as a brand owned by Ford Motor Co.
More than half a century before telling the world this week that it will build a $500 million vehicle assembly plant in Ridgeville, S.C., Volvo opened a small-volume final-assembly plant in Halifax, Nova Scotia. It operated from 1963 until 1998.
That knockdown kit factory assembled only about 8,000 cars a year -- just enough to sell in Canada and export to the United States to qualify for favorable import tariff treatment. It closed when the North American Free Trade Agreement swept away the Canadian tariffs.
But Volvo always wanted more.
In 1976, Volvo built a $150 million assembly plant in Chesapeake, Va. But after the plant was completed, Volvo changed its mind, blaming falling U.S. sales and fluctuations in U.S.-Swedish currency exchange rates. The plant now produces Volvo marine engines.
In 1987, AB Volvo’s chairman at the time, Pehr Gyllenhammar, told the press that Volvo was again contemplating a U.S. assembly plant in response to changing currency exchanges.
And in the 1990s, Volvo again began studying the construction of a U.S. car plant, this time a full-fledged manufacturing operation, probably in the Southeast.
That proposal had a team of Volvo executives working for months to review manufacturing scenarios in the South, and they came to within three months of making a final decision about where to build it.
But new federal safety regulations were pending. And some executives worried that what had made Volvo popular with car buyers -- its attention to safety technology -- was about to become so common around the industry that it might no longer give Volvo a competitive edge.
Ford acquired Volvo in January 1999, after which there was no discussion of an independent U.S. factory for the brand until now, five years after Ford divested the company.