Daimler Trucks cautiously resumes US production (Update)

Daimler manufacturing

Editor’s Note: Updates with Volvo Trucks North America reopening on April 27

Daimler Trucks North America (DTNA), the largest manufacturer of heavy-duty trucks in North America, resumed production at its U.S. plants this week, albeit with plant-specific worker protections in place.

The maker of Freightliner and Western Star trucks had suspended production on March 24 on a week-by-week basis at plants in Mount Holly and Cleveland, North Carolina; Gaffney, South Carolina; and Portland, Oregon.

“We are going to great lengths to ensure the safety of our employees and continue to assess the situation daily,” the Portland-based subsidiary of Daimler Trucks AG said in a statement. “The safety and well-being of our employees is our priority as we return to work to support the critical essential infrastructure of the country.

“In addition to providing PPE at our locations, we have localized task forces comprised of both plant management and union labor representation at each of our manufacturing facilities to safeguard the health of our employees and to continue to assess our measures daily.”

Parent company Daimler AG (OTC: DDAIF) began reopening Mercedes-Benz car plants in Europe this week as well.

Other truck makers reported various states of operation.

Navistar International Corp. (NYSE: NAV), which makes International trucks in Springfield, Ohio, and Escobedo, Mexico, said last week it was extending its production suspension until early May while also trying to conserve cash. The company on Tuesday said it plans to sell $500 million in senior secured debt depending on market conditions.

“The extent of this virus is unprecedented, and our personal lives, businesses and global economies are being impacted by events beyond our control,” Navistar CEO Troy Clarke said April 14.

Volvo Trucks North America will reopen its New River Valley manufacturing complex in Dublin, Virginia on April 27.

“We will be building trucks at a reduced rate on one shift and with reconfigured manufacturing processes, both of which will allow for increased social distancing for our employees,” a company spokeswoman said

Volvo is also requiring all employees to wear face coverings and observe social distancing in high-traffic locations.

Mack Trucks, a Volvo Group sibling, did not provide an update on production, which had been suspended production through April 17 in Lehigh Valley, Pennsylvania. 

The status of an engine plant in Hagerstown, Maryland, that serves Volvo and Mack assembly plants was unknown. It had been closed through April 10.

PACCAR Inc., (NASDAQ: PCAR) parent of Kenworth Truck Co. and Peterbilt Motors, told analysts on its first-quarter earnings call Tuesday that it was gradually reopening plants, starting with Europe and Australia.

“It’s going to be done on a location-by-location basis in a phased manner,” PACCAR CEO Preston Feight said. “We will work through the rest of our plants in the coming weeks and make sure we take care of the employees and bring the truck factories back up and running.”

Truck manufacturers face a difficult environment as new equipment orders were already challenged by overproduction in 2018 and 2019.

The coronavirus pandemic made the situation more dire as North American industry inventory-to-sales ratios of unsold trucks swelled to 4.1 months at the end of March compared with the desired 2.5 months, according to ACT Research.