Truck Cancellations Hit Two-Year High As Rebound Slows

If the economy really is "recovering" maybe someone would care to explain this, as reported by Bloomberg:

North American heavy-truck orders are hitting a speed bump, with cancellations jumping to the fastest pace in about two years as a stagnating economic recovery prompts fleet owners to delay or scrap purchases.

The March rate shot up to 9 percent from 6.1 percent a month earlier, according to data compiled by Bloomberg. North American freight shipments fell 1.3 percent in March and grew less than 1 percent in April, according to Cass Information Systems Inc.’s Freight Shipment Index.
Buyers are being squeezed by slower cargo volumes, tighter credit and diesel fuel prices exceeding year-earlier levels even with recent declines. That may erode profits at truck makers such as Paccar Inc. (PCAR) and Navistar International Corp. (NAV), and damp the manufacturing rebound that has bolstered U.S. job growth.

It “creates a situation where these guys say, ‘You know what? I’m just going to hold on for a little bit and maybe cancel or move my order out a bit,’” said Eric Starks, president of Nashville, Indiana-based forecaster FTR Associates.

Preliminary April orders for Class 8 trucks added to evidence of a surprise slowdown by falling to the lowest since September 2010, according to FTR data. Continued weakening in orders may lower industry expectations, Peter Nesvold, a Jefferies Group Inc. analyst, wrote in a note to clients May 4.

That’s already happened at FTR. As recently as March, the firm was predicting Class 8 shipments of 285,000 units, or 12 percent more than a year earlier. It has since cut that estimate to 275,027 units, an 8 percent increase, as truckers delay purchases to refresh the oldest fleet since at least 1980.

Once again, which statistics do you trust, real world measurements like this or the politically charged data like unemployment and GDP that the media hypes relentlessly?

Kenworth Truck Company (Ohio) Announces Significant Layoffs

Catch the key phrase at the end of this article from ONNtv.com:

Ross County Job and Family Services were told Wednesday that the Kenworth Truck Company plant in Chillicothe would be making a significant cut to its staff, nearly 10 percent, ONN’s Denise Alex reported.

James Ford is the deputy director of Ross County's Job and Family Services.

"We made contact with the company to verify that 250 individuals were being laid off," Ford said.
Ford said that his agency is already preparing packets for those laid off employees to assist with unemployment, medical assistance and job re-training.

“We have to focus on the skills that are transferable. Their knowledge of mechanics. Their knowledge of details. The ability to perform tasks. How closely they need to be supervised. All those things are transferable into another position," Ford said.

Kenworth, which assembles trucks, said that despite having 73 straight years of profitability, demand has recently been down.

Yet another indicator that all of the talk of economic recovery is nothing but hot air. It stands to reason that if the economy was actually picking up, the company that makes the trucks that move the goods and services would not be seeing a decline in sales.


Bonus: Sounds like the dream is turning into a nightmare

Commercial Vehicle Group Lays Off 100 In North Carolina

Globalization claims another 100 victims. Here is WCNC.com with the details:

About 100 full-time and temporary employees are being laid off from the Commercial Vehicle Group manufacturing facility in Statesville as the company shifts production to be closer to its clients.

The New Albany, Ohio-based company notified state and local officials last week of the impending layoffs at the 2227 Salisbury Highway plant.

Commercial Vehicle Group makes components like suspension seat systems and door panels for heavy-duty trucks and other commercial vehicles. The company and many of its customers operate using the "just-in-time" production strategy, meaning they keep little inventory and need new shipments quickly.

So as truck manufacturers shift production out of the country, Commercial Vehicle Group is as well to supply them.

"Essentially, we're following where our customers take us," said John Hyre, spokesman for the company.

Love how the Corporate Flack tries to push the blame off on other companies that are doing the same thing. I thought the whole point of globalization is that you could make your shit anywhere in the world and then ship it to where you need it. Is this perhaps a tacit admission they they are being affected by rising oil prices and transportation costs?


Bonus: "It's just like a ride...maybe some time...they'll make it a ride...all over the world"