Editor’s Note: Updates with Navistar adding two facilities to shutdown list
Major truck manufacturers are extending production suspensions through most of April while a Wall Street firm is lowering its production estimate to less than half of 2019.
PACCAR Inc. (NASDAQ: PCAR) began the latest round Wednesday when it said it would shutter its plants globally until April 20. PACCAR is the parent company of Peterbilt Motors, Kenworth Truck Co. and European truck maker DAF.
Other manufacturers followed.
Daimler Trucks North America, a unit of Stuttgart, Germany-based Daimler AG, extended suspensions to April 13 for Freightliner heavy-duty truck plants in Mt. Holly and Cleveland, North Carolina; the Freightliner Custom Chassis plant in Gaffney, South Carolina; and the Portland Truck Plant in Oregon, where Western Star vocational trucks are assembled.
Daimler’s Saltillo and Santiago truck plants in Mexico will remain shuttered until April 20.
Mack Trucks won’t resume building at its Lehigh Valley, Pennsylvania, operation until April 17, spokesman Christopher Heffner said.
Volvo Trucks North America is running “very limited” production at its New River Valley operation in Dublin, Virginia, Volvo Group spokeswoman Mary Beth Halprin said.
A powertrain manufacturing plant in Hagerstown, Maryland, that builds engines for Mack and Volvo is shuttered until at least April 10.
“A small number of employees will work on site, performing essential activities, while following safe-distancing practices,” Halprin said.
Navistar International Corp. (NYSE: NAV), extended the idling of its Springfield, Ohio plant until April 27 because of a continuing supply chain interruption. The company added its engine assembly plant in Huntsville, Ala. and truck assembly plant in Escobedo, Mexico to its shutdowns. Production will resume in Huntsville and Escobedo on Monday, April 13.
Navistar’s IC Bus Manufacturing Plant in Tulsa, Oklahoma, and all Navistar service facilities and parts distribution centers continue regular operations.
Separately, J.P. Morgan updated its trucking model to adjust for the economic disruption resulting from the pandemic. The firm lowered its North American Class 8 builds forecast to 162,000 units in 2020, down 53% from a near-record 345,000 units in 2019. It forecasts a 30% improvement to 211,000 units in 2021.
J.P. Morgan’s production estimate mirrors the latest projection from ACT Research, whose estimate did not factor any production suspensions.
Despite the overall manufacturing declines, J.P. Morgan raised its rating on PACCAR to overweight from neutral, citing its valuation and balance sheet strength. PACCAR said it had $4.3 billion of manufacturing cash and marketable securities at the end of March and access to existing lines of credit of $3 billion.
J.P. Morgan maintained its neutral rating on Navistar but cut its 2020 adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) to $329 million from $705 million, expecting a 26% decline in manufacturing sales.