Class 8 truck orders tumble to decade low
Story by:@ FreightWaves.com
Softer economy and 2018 buying frenzy dropped hammer on 2019 bookings.
Orders of new Class 8 trucks tumbled to their lowest annual level in a decade in 2019 as a softening economy and a booking frenzy in 2018 combined to clobber orders.
Year-over-year new truck orders fell again in December, though the 20,000 bookings were up 14% over November, according to ACT Research.
“Overbuying through 2019 and insufficient freight to absorb the ensuing capacity overhang continued to weigh on the front end of the Class 8 demand cycle in December,” said Kenny Vieth, ACT president and senior analyst.
Five-year look at Class 8 truck orders. SONAR Ticker: ORDERS.CL8
Truck makers saw the slowdown eat away at a record industry backlog of a year ago and cut production that resulted in thousands of job losses.
Daimler Trucks North America laid off 900 workers in October. Volvo Trucks North America is cutting 700 jobs this month. Paccar Inc. (NASDAQ: PCAR) trimmed 100 jobs at its Kenworth division in addition to attrition in November. Navistar International Corp. (NYSE: NAV) is laying off 1,300 workers this month.
The pinch also impacted major suppliers like engine maker Cummins Inc. (NYSE: CMI), which is cutting 2,000 jobs globally.
Mack Trucks, a Volvo Group unit, said in December it expects to lay off workers in January but declined to estimate how many. Mack lost two weeks of production to a United Auto Workers strike in October. It plans two down weeks late in the first quarter to adjust production and two additional down weeks in the second quarter for plant modifications.
“Recent industry orders have been running below replacement level,” Navistar CEO Troy Clarke said on the company’s fourth-quarter earnings call Dec. 17. “I believe the industry is working through a period of transition and then orders will pick up and recover in the second half of the year.”
If that doesn’t happen, more cuts may lay ahead.
Read the full story HERE @ freightwaves.com
Source and credits: freightwaves.com /Alan Adler / iTrucker / Mario Pawlowski