CHICAGO Truck and engine
builders and suppliers of axles, wheels and other components
are working quickly to cut production, trim work forces and
lower costs as demand for Class 5 to 8 trucks has fallen
precipitously in the second half of 2012.
"Demand has dropped sharply over
the last three months, reflecting a high degree of uncertainty
among customers in most geographic markets," Cummins Inc.
chairman and chief executive officer Tom Linebarger told
Cummins engine sales fell 14 percent in the third quarter
compared with the same period last year. "We have been
responding ... by delaying or canceling projects, flexing
production at some of our manufacturing plants, reducing
discretionary expenses and reducing our work force by 1,000 to
1,500 people by the end of this year," Linebarger said.
Swedens Volvo Group said
U.S. customers had been cautious ahead of the presidential
election and remain so ahead of the outcome of budget
discussions, affecting demand expectations for 2013. This
wait-and-see approach affected order intake for heavy-duty
trucks, which declined 33 percent year over year, Volvo said in
its third-quarter earnings report.
Lisle, Ill.-based Navistar
International Corp. intends to close its Garland, Texas, truck
manufacturing plant during the first half of 2013, transferring
output to plants in Ohio and Mexico. "Navistar has too much
manufacturing capacity in North America," president and chief
operating officer Troy Clarke said.
The company predicts its 2012
invoiced medium-, heavy- and severe-duty trucks will total
49,200 vehicles worldwide, down 25.6 percent from 66,100 last
"We have to lower the breakeven
point," Navistar executive chairman and interim chief executive
officer Lewis Campbell said Tuesday. "We have prioritized all
engineering programs around return on invested capital (ROIC)
and eliminated or put on hold programs that dont
contribute. Next, we are looking at all noncore businesses.
Those businesses not contributing to (core) North American
truck, engine and parts" operations will undergo financial
review. "Projects that dont have sufficient ROIC
capability and arent a strategic fit will be fixed and
sold, or closed."
Paccar Inc., Bellevue, Wash.,
delivered 31,200 trucks during the third quarter, about 17
percent below second-quarter deliveries. U.S. and Canadian
Class 8 industry retail sales and production are expected to be
flat in the fourth quarter, Paccar chairman and chief executive
officer Mark C. Pigott told investors, but 2012 sales will grow
about 9 percent vs. 2011 while European sales are expected to
fall between 6.6 and 10.8 percent.