Truck makers and suppliers suspend production (Update)

Wabash National tears up full-year earnings guidance

Truck makers Volvo Trucks North America and Mack Trucks and engine supplier Cummins Inc. are suspending production at U.S. assembly plants, idling workers because of the coronavirus pandemic and supply chain stress.

Cummins (NYSE: CMI) said late Friday it was suspending production at its Midrange Engine Plant in Walesboro, Indiana that makes engines for Fiat Chrysler Automotive’s Ram Trucks plant. The Ram plant in Warren, Michigan closed Thursday until at least March 30 because a worker was diagnosed with coronavirus.

Cummins also withdrew its earnings guidance for 2020, joining trailer maker Wabash National (NYSE: WNC) in claiming the financial impact of the pandemic is negative but that it is too soon to know how bad it will get.

Public companies like Wabash and Cummins are required to tell the U.S. Securities and Exchange Commission of anything that could result in a material change to its financials.

Volvo and Mack suspensions

Volvo Group siblings Volvo Trucks North America and Mack Trucks led the way among heavy-duty truck makers in suspending production.

Mack and Volvo make all their trucks for sale in the U.S., Canada and Mexico at their respective locations in Lehigh Valley, Pennsylvania and Dublin, Virginia. The two plants employ about 5,000 workers. A powertrain plant in Hagerstown, Maryland that feeds both assembly plants also will shut down from March 23-March 27.

Mack began its shutdown on Thursday at the Lower Macungie Township plant, spokesman Christopher Heffner said.

“During this suspension, we will be exploring new ways of working and possible approaches to production that would allow for increased social distancing in the facility,” Volvo Group spokeswoman Mary Beth Halprin told FreightWaves.

“The health and safety of our employees and communities will be our primary concern as we work to make the most informed decisions we can during this uncertain time.”

Special divided dropped

AB Volvo (OTC: VLVLY), the Swedish parent company of the Volvo Group siblings, said Thursday it was pulling a recommendation for a $0.73 per share special dividend it had proposed for the company’s April 8 annual meeting.

“Many of the Group’s operations are, or will be, temporarily closed and it is currently not possible to assess the duration,”  the parent company said in a statement.  

“In order to ensure that the Volvo Group can act from a position of strength in the current turbulent environment, the Board considers that it is prudent to maintain the proposal for the ordinary ($0.53 per-share) dividend, but withdraw the proposal for an extra dividend.”  

Wabash tosses earnings estimate

Wabash National said Friday it does not expect to meet its first quarter or full year 2020 guidance provided on February 12.

“Given the rapidly evolving situation, the company is currently unable to quantify the full impact of COVID-19 on its outlook and expects to provide additional information during its first-quarter earnings call,” Wabash said in a statement.

Wabash National designs and manufactures dry freight and refrigerated trailers, platform trailers, bulk tank trailers, dry and refrigerated truck bodies, as well as structural composite panels, aerodynamic solutions for trailers and specialty food grade and pharmaceutical equipment.

A company spokeswoman told FreightWaves it knows of no coronavirus cases in Wabash plants. She declined to answer whether line rates had been cut or any employees had been laid off.

“Customer pickups [of finished trailers] have been behind our initial expectations and we anticipate growing supply chain disruption in the coming weeks,” said Brent Yeagy, Wabash president and CEO. 

Other shutdowns

In other transportation-related production suspensions related to coronavirus:

–Toyota Motor Corp. is closing its plants in the U.S., Canada and Mexico on Monday and Tuesday and expects to resume production Wednesday, March 24, according to Ward’s Auto.

–Kia Motors Manufacturing has begun a two-day shutdown in West Point, Georgia because of a supply chain issue.

–Hyundai Motor America suspended production at its Montgomery, Alabama manufacturing plant after an employee tested positive Wednesday for COVID-19. The South Korean automaker did not specify how long the Montgomery facility would be shuttered.

–The Detroit 3 automakers — General Motors Co. (NYSE: GM), Ford Motor Co. (NYSE: F) and FCA (NYSE: FCAU) said Wednesday they would shut all North American plants until March 30, idling 150,000 workers.

–Honda Motor Co. said Wednesday it was shuttering 12 plants in North America, including transmission and engine plants in Alabama, Indiana, Ohio, Canada and Mexico, for six days due to a drop in demand. A total of 27,600 workers are affected.

One Comment

  1. The Mack Truck Plant in Macungie Pennsylvania has stopped production until March 30th. I am a Production Technician there and work on the line.
    You need to get your information correct before you publish it.
    And this was a planned 2 week shutdown since either the end of last year or January because they are having construction done to bring the frames for the heavy duty and highway Trucks back in house to build.
    As for the Coronavirus impact, as a Union worker there, we do not know yet if we will be going back to work on March 30th yet or not, it I guess depends on what Mack Trucks decides would be best for us.

Alan Adler

Alan Adler is a Detroit-based award-winning journalist who worked for The Associated Press, the Detroit Free Press and most recently as Detroit Bureau Chief for He also spent two decades in domestic and international media relations and executive communications with General Motors.