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Paccar and Other OEMs Slow Production

March 16, 2000

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Paccar divisions Kenworth and Peterbilt are the latest OEMs to cut back production in the face of declining Class 8 orders.

Kenworth will furlough up to 300 workers at its Seattle and Renton, WA assembly plants beginning April 3, the same day it trims production of heavy-duty trucks by 38.9% at the Renton facility from 50 to 36 units per day. It also idled heavy-duty truck production lines at Renton and in Chillicothe, OH, last Friday and will do so again today to reduce inventory levels. The downtime will remove 204 units of trucks from production.
"The North American Class 8 truck market continues its decline of recent weeks. Kenworth has taken several actions to address the reduction in orders, including proactive sales and marketing
programs, as well as shutdown days, but the order intake is less than our build rate," Kenworth said in a statement.
Industry officials are forecasting an 18 per cent to 20 per cent contraction in U.S. retail sales of Class 8 trucks this year.
Peterbilt Motors disclosed last week that it will cut heavy-duty truck production by 2.9 per cent to 68 units per day from 70 units on March 20 at a plant in Madison, TN. It also will idle the Madison facility today, removing 70 units of heavy-duty trucks from the company's production schedules.
Paccar's Mexican truck-making unit, Kenworth Mexicana S.A. de C.V., reduced output of Class 8 trucks in Mexico by 12.9 per cent earlier this year. It is now building 27 trucks a day at a facility in Mexicali, Mexico, compared to 31/day during the last few weeks of 1999.
Western Star Trucks has slowed the initial ramp-up at a new heavy-duty truck assembly plant in North Charleston, S.C., but has yet to cut output at its headquarters location in Kelowna, BC.
The firm currently builds only three trucks a day at the $32.0 million North Charleston facility, which opened last November. It will double output there to six/day by June, far less than the 20/day it had originally scheduled by June.
The company continues to assemble 31 trucks a day at Kelowna, unchanged from last year. Diminished demand has allowed it to reduce its backlog of unfilled orders for new trucks by 16.7 per cent to about 2,500 units from 3,000 units one month ago.
The company has a new headquarters facility and manufacturing plant under construction in Kelowna. It is scheduled for completion in 2001.
Navistar International will idle its heavy-duty truck plant in Chatham, Ont., for one week beginning April 3 to reduce inventory. Navistar also will slash production of Class 8-type
trucks at Chatham by 15.4 per cent to 110 units from the current 130 units on March 27.
Volvo idled assembly of VN-model heavy-duty trucks at its Dublin, VA plant for a week last month, removing 560 units of Class 8 trucks from production schedules. The plant continued to build 25 units of heavy-duty specialty-type vehicles per day during the temporary shutdown.
When assembly of VN-model trucks resumed after the one-week break, Volvo cut daily production of the vehicles by 21.6 per cent to 80 units from 112 units.

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