Mack first-quarter deliveries decline 21 percent

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The Morning Call  /  April 22, 2016

Mack Trucks didn't get off to the strongest start this year — at least compared with the way the heavy truck maker sprinted out of the gates in 2015 on its way to its best year in about a decade.

Mack delivered 5,176 trucks worldwide in the first quarter of the year, a 21 percent decline from the 6,571 it sent out during the same period in 2015, according to a report released Friday by the Volvo Group of Sweden, Mack's parent company.

Mack delivered 4,843 trucks — or 93.5 percent of the total — in North America, a nearly 21 percent decline from 6,097 a year ago.

Deliveries of Volvo trucks also dropped, declining 41 percent in North America, but boosted by gains in Europe and Asia, fell only 8 percent worldwide.

A sharp decline was also reported in net orders for Mack and Volvo.

Mack took in 4,117 orders in North America in the first quarter, a 48 percent decrease from 7,977 last year. Similarly, Volvo recorded 4,687 orders in North America, a 58 percent decline from 11,200 during the first three months of 2015.

The decline in deliveries and orders in North America is not surprising, given the peak year the company enjoyed last year and its expectation that demand would weaken once 2016 rolled in.

For the entire Volvo Group — its Renault Trucks and UD Trucks also have a small presence in North America — orders in North America were down 54 percent and deliveries declined 33 percent in the first quarter.

"The heavy-duty truck market is evolving as we expected, and orders have slowed as the market corrects for excess inventory in the pipeline," Mack spokesman Christopher Heffner* said in an email.

Volvo noted in the report that rates in the group's North American production system were reduced in the quarter to meet the lower demand and allow for inventory reduction at dealers.

Mack laid off about 400 people at its Lehigh Valley Operations in late January to meet the reduced demand in the market.

Mack's 1-million-square-foot LowerMacungieTownship plant is where all Mack trucks built for the North American market and export are assembled. Local operations, called Mack Lehigh Valley Operations, employ about 1,430.

Mack last week announced plans to invest $70 million in the Lower Macungie facility over the next three years, an expansion aimed at modernizing the 40-year-old plant and making it more efficient.

One day after announcing the investment, Mack confirmed that Wade Watson, who was vice president and general manager of Mack Trucks Lehigh Valley Operations for less than a year, was no longer employed by Mack or Volvo.

Heffner said Friday that Antonio Servidoni**, vice president of production systems for Volvo Group Commercial Vehicle Assembly, will be the acting plant manager for Mack Lehigh Valley Operations (aka. Macungie) until the company names Watson's successor.

Related reading:

http://www.bigmacktrucks.com/topic/44939-volvo-group-%E2%80%93-2016-first-quarter-earnings-report/

http://www.bigmacktrucks.com/topic/44866-local-mack-boss-out-volvo-confirms/#comment-330687

* Mack brand spokesman Christopher Heffner has worked for Volvo since August 2014. Previously, he was a “senior communications associate”, “community relations associate”, “communications associate” (translation: telephone operator) and lab tech at Dow Corning. Chris, who graduated from college in 2004, has zero background in the truck industry. Thus, how he would be able to predict the truck market's developments is a mystery.

** Antonio Servidoni has been Volvo Production system VP for North and South America since June 2012. Previously, he was Volvo’s lean manufacturing and industrial engineering director from August 2007 to June 2012, and manufacturing engineering manager at Volvo Trucks Brazil from June 1997 to July 2012.