Order intake numbers may be way up for the first four months of the year, but many of those trucks are not going to see the light of day anytime soon.


According to Jim Hebe, Navistar's senior vice president of North American sales operations, there's going to be a big gap between order intake and build rates, simply because the supply base isn't there.

"There are a lot of orders of orders out there, but I'm going to tell you something: They aren't going to get built because just isn't the supply base out there to handle the kinds of increases we're seeing," Hebe said at a press event in Tooele, UT.

ACT Research reported earlier in May that North American Class 8 commercial vehicle orders climbed to 38,200 units in April -- up 158 percent from year ago.

Last month, ACT reported the Class 8 build back log had reach 108,000 units on estimated annualized production of more than 300,000 units.

Speaking strictly for Navistar, Hebe said his company can't raise production beyond where it is now, and he noted that he has heard similar concerns raised by his competitors.

"We're hearing from other manufacturers on this, too. They are asking if we're having the same supply issues they are," Hebe says. "They've got lots of orders and lots of demand, but they just don't have the capacity to build either."

Hebe warned a couple of years ago that a rapid turnaround in truck production following the recession was unlikely because the supply base wouldn't be there to support it. A lot of it has moved offshore, he noted.

"The big problem is that we don't know where the tier two or tier three suppliers are. You may be dealing with a tier one supplier, but then you find out they can't deliver, and it's not them. It's their tier two and three suppliers in India or China or Korea, who for some political or economic reason, can't deliver and guess what; the whole thing falls apart," he points out. "A lot of production has also moved to Mexico in the past few years. There isn't the capability to ramp up capacity in those other countries like we have here. It's just not going to happen."

Asked if this situation would force a rethink on where North American truck makers source production materials, Hebe said "It damn sure has at our company."