Volvo of American Corporation, subsidiary of AB Volvo of Sweden, broke ground amid great fanfare and promise 25 years ago for a plant to assemble cars in Chesapeake, Virginia. None was ever built there, but the forgotten venture has earned a place in automotive history for other reasons. Here's its story.

Because of its success in the United States, Volvo toured potential sites for an American assembly plant in mid-1973, including several others in southeastern Virginia, before settling on one in the rural Greenbriar area some 4 miles (6.3 kilometers) due south of Ford's light truck plant in Norfolk. In that year, the US became Volvo's largest market, larger than even Sweden. Originally part of Greenbriar Farms, a huge nursery, the 502-acre (203 hectare) site was on Greenbriar Parkway on the southern side of Interstate 64 and had rail access. Volvo announced in September 1973 that it would spend $100 million to build the plant-an estimate soon increased by half. The intent was to begin production in late 1976; by the mid-1970s, the 240 and 260 series 2- and 4-door sedans and wagons were the cars sold in the US.

The ground-breaking ceremony was held on July 2, 1974, with speeches not only by Volvo of America president Björn X. Ahlström and Chesapeake mayor Marian P. Whitehurst, but also the governor of Virginia, Mills E. Godwin, Jr. In 1967, during his previous term, Godwin had visited Europe, on what he later called "a fact-finding trip," to see "how European companies felt about making investments in America." Among those contacted then was AB Volvo. In his speech to 200 business leaders and government officials at the ceremony, he took credit for Volvo's decision to place the plant in Virginia. Being chosen for what would have been the first car assembly plant operated in the US by a foreign manufacturer since Rolls-Royce's Massachusetts venture in 1921-1931 was a feat for the state and the city. A road on the south end of the site was named Volvo Parkway in the company's honor, and other facilities and areas also adopted the Volvo name. (Volvo Penta, the subsidiary that makes power drives for boats, built a plant and offices on Volvo Parkway.)

Ahlström told reporters at the ceremony that the plant would build 100,000 cars annually and employ 3,500 people once it reached full production, though the first year's production would be limited to about 25,000. But a harsh recession was hitting. By the spring of 1975, he was giving assurances that Volvo would continue with the venture despite the slump. In June 1976, as construction was being completed, Volvo announced that production would be delayed from that fall until February 1977. By the end of 1976 came word of further delays. According to one former employee, some tooling had been installed and was changed to reflect modifications for new model years, but permission to start production never came. The reason, he said, was that Volvo wanted its US car sales to hit 100,000 cars a year first.

But recession, inflation, unused European manufacturing capacity, and a decision to move its products upmarket had hit Volvo's US sales hard. John Dinkel said in Road & Track in 1977: "The Volvo owner who laid out $4,000 for a 1972 144E is shocked when he walks into a Volvo showroom today and is faced with a price tag approaching $7,000 for a 242 and a mind-boggling $10,000 for a 265DL station wagon....[T]he downturn of Volvo's fortunes in the US can be directly traced to price resistance." Patrick Bedard of Car and Driver noted in 1976 that a loaded 264GL "costs as much as a Cadillac." Sales slowly recovered and hit a "record" 37,066 cars in the US during the first half of 1981-still an annual rate of only 74,000. The 100,000 mark was finally broken in 1986 with 113,267 US sales, too late for the Chesapeake plant.

Instead, by the early 1980s, the idea of manufacturing cars there had been abandoned. Dozens of structures and a circular track of approximately 0.3 miles (0.5 kilometer) planned for the site were never built. Portions of the main building-which was over 1,200 feet (365 meters) long with 234,000 square feet (21,700 square meters) of floor area-were then being used to process for delivery to dealers cars and trucks imported from Sweden, employing about 120. In 1982, Volvo announced plans to convert the plant to build municipal mass-transit buses instead of cars. Starting early that year, demonstration models were provided to authorities such as NJ Transit, whose driver of an articulated (able to bend in the middle) unit was ticketed by a state trooper for being over the length limit for the New Jersey Turnpike. On October 13, 1983, around the time bus production began in earnest in Chesapeake, Volvo revealed it had received its first US bus contract: 50 to the Southeastern Pennsylvania Transportation Authority (SEPTA) for use in Philadelphia for $10 million, to be delivered through the following summer. Another order for 15 buses for San Mateo, California, quickly followed.

Now with about 300 employees, making it Chesapeake's largest private employer, the plant could produce 300 buses annually using two assembly lines. Each bus required about 1,200 man-hours to build. Ahlströmsaid in an interview in 1984 that 600 could be manufactured a year if demand warranted. The firm was hoping to get about 10 percent of the 5,000 mass-transit buses sold annually, based on early 1980s figures.

Volvo did not use model designations in its US literature but simply called its two models "transit buses." One was a 40-foot (12-meter) 2-axle standard coach, the other a 60-foot (18-meter) 3-axle articulated bus that could seat more than 70 people. They used what was essentially the Volvo B10M standard or articulated steel chassis designed explicitly for bus service, as used in Europe. However, in contrast to what was then the normal European practice of having a body coachbuilt on a bare chassis, Volvo for the first time built its own production bus bodies. They were made of a special corrosion-resistant aluminum. The powertrain used Volvo's 10-liter THD100 turbodiesel engine mounted under the floor with a 4- or 5-speed automatic transmission. As was typical of the market, the buses had compressed-air brakes, an air suspension system on I-beam axles, and power-assisted recirculating-ball steering. the articulated bus had a steerable rear axle and could turn in about the same outer and inner radii as the coach.

Though Volvo sold trucks in the US for several years, the firm did not pursue the bus market until after making changes not only to meet federal regulations, but also potential customer's expectations. One such regulation to be met for the purchaser to qualify for federal subsidies was that 51 percent of the equipment had to come from US manufacturers, so the axles and powertrain were imported with most of the rest fabricated in the States. For the higher US summer temperatures, an improved optional air conditioning system was necessary, so the articulated units actually used an auxiliary diesel engine to run the air conditioning compressor! Though some purchasing authorities would not allow Volvo name to appear on the buses, the front ends were identifiable because of their styling similarity to Volvo's cab-over heavy trucks of the time and, where permitted, the oblique "slash" in the grille.

Unfortunately, the firm faced a lot of competition. Not only were General Motors and Grumman building buses when Volvo entered the market, but other foreign manufacturers such as MAN and Saab-Scania soon jumped in as well. Yet that market was shrinking fast. The price of a typical 60-foot articulated bus fell from about $270,000 in 1982 to $200,000 in 1986; the average coach price industry-wide fell from $165,000 to $130,000. Sales had dropped to 3,000 units a year nationwide in 1985; fuel prices had stabilized and the economy had improved from the early 1980s, so more commuters drove instead of taking the bus. The US Congress had also cut mass-transit funding. Bus producers were running at only 30 percent of capacity; nobody was making money in the business. Volvo was no exception. The die was cast.

On January 10, 1986, Volvo North America Corporation (its name by then) announced that it would stop building buses in Chesapeake and would withdraw from the US bus market. It was a grave blow from what had been called the city's "industrial crown jewel." That morning, executives had met with the mayor and city manager and that afternoon addressed some 280 employees to give them the news. In a press conference, Ahlstöm called the firm's bus losses "substantial" without providing an amount and said, "we did not see any opportunity to turn around in the future." Because of the market conditions, he added, "I don't think anybody is making money at this time." Despite the importance of the North American market to Volvo generally, only some 120 production buses had been delivered in the US over 2 years, compared to 3,240 worldwide sales of its buses in 1984 alone. The firm planned to fill current orders for some 140 more before closing the line by the fall. One contract was later cancelled. When the end finally came by October 1986, some 220 buses had been built in Chesapeake. Processing of imported vehicles ended there at about the same time, and the equipment was auctioned.

By December, the plant was empty, and on January 1, 1987, a local commercial real estate took it over. Volvo found jobs for some employees at its other facilities but had to let others go with a severance package. The firm took pains to praise the quality of their work. About 190 of the 300 were production line workers represented by the United Auto Workers (UAW) union, which also had some severance stipulations in its contract. To this day, says one former employee, many of those who worked at the Chesapeake operation in any capacity will tell you that it had the best pay, benefits, and working conditions of any job they've ever held. The buses were a well-designed, well-built, premium product build by a dedicated workforce. Most of them are still on the road.

Volvo had agreed to maintain a parts and service operation and this office still exists on the other side of Interstate 64. Volvo Parkway still has that name and Volvo Penta is still on it. The rest of the street had been mostly empty or wooded when the plant shut down; now it has been filled with shops, hotels, and business office buildings. A railroad spur built by Volvo was removed in the mid-1990s. The employee parking lot still exists but is grassed over; the guard gatehouse, now derelict, and a short stretch of the original entrance road are nearby. A new road, Crossways Boulevard, winds through the site and passes by the north end of the main building. That building and the nearby powerhouse built with it have been gutted and renovated and now house several businesses and government offices. In fact, the plant is now known as Crossways Commerce Center I. Little remains to suggest that new buses once emerged from it.

Maybe you don't care much about buses, but you should still take interest in Volvo's Chesapeake operation. It was because of that ground-breaking in 1974 that Volkswagen's US executives put pressure on headquarters in West Germany to build what was to become the plant in New Stanton, Pennsylvania, that built Rabbits, Golfs, and Jettas from April 1978 until July 1988. That, in turn, helped lead to Nissan and then other Japanese manufacturers setting up US assembly plants. Today's American-built Toyota Camrys and Honda Accords owe something to Volvo for taking the plunge. Also, Daimler-Benz broke broke ground in 1979 for a Mercedes-Benz truck assembly plant in Hampton, Virginia. That operation has since closed, but Daimler-Benz soon made investments of a different sort-buying Freightliner in 1982 and, ultimately, Chrysler.

And Volvo was encouraged enough to make other investments of its own in the States: building Class 8 heavy trucks under its name in the former White truck plant in Dublin, Virginia, since 1982 and, ironically, in recent years buying Novabus-thereby reentering the North American bus market. Referring to foreign investment in American and Virginia in particular, the late Governor Godwin had told reporters 25 years ago, "this is a trend that will continue." Little could he have known just how true those words would be or what they would mean for the American vehicle industry.