Mack Trucks is well on its way to making up lost production from a 12-day United Auto Workers' strike and sees state-level infrastructure spending buoying its off-highway vocational truck business in 2020.
Order banks for Class 8 trucks are shrinking after 10 consecutive months of lower year-over-year orders across the industry. It is easier to make up production now than it would have been during a crush of orders being placed a year earlier.
"We're confident because of where the market is that we'll be able to make up the units," Mack President Martin Weissburg told FreightWaves at the North American Commercial Vehicle Show on October 28.
The UAW struck Mack for the first time in 35 years from October 14-25, idling 3,500 workers at six facilities in three states. The strike also caused Volvo Trucks North America to halt production at its plant in Dublin, Virginia because it shares an engine and transmission plant in Hagerstown, Maryland with Mack.
Volvo and Mack, which are part of the Swedish Volvo Group, said normal operations should resume by next week.
The UAW, which was striking General Motors Co., at the same time as Mack, coincidentally settled both labor disputes within days of each other. It is possible the Mack strike was intended to add pressure to common suppliers losing millions of dollars a week in the 40-day GM strike.
The union claimed that in addition to striking over pay and benefits, it was concerned about job security and the future of Mack operations in Lower Macungie in Pennsylvania's Lehigh Valley.
Mack and Volvo are the only major truck makers that build all their trucks for North America in the U.S. The two companies together have more than $1 billion in investments underway at their assembly plants.
"There's the negotiations and then there's the PR," Weissburg said.
He declined to characterize the talks that continued for two weeks after the three-year contract expiration on October 1 before the strike began October 13, a month into the UAW strike at GM. UAW members are voting on the ratification of a new four-year agreement.
"We have three generations of Mack employees in our plant," Weissburg said. "No one is more committed to maintaining investment in the U.S. Our actions speak louder than words from anyone."
Mack boosted its estimate for Class 8 industry retail deliveries in 2019 to 340,000 from 325,000 just a few weeks ago. September retail sales, led by record Freightliner deliveries from Daimler Trucks North America, led to the upward revision, said Jonathan Randall, Mack senior vice president of sales and marketing.
Retail deliveries for the industry next year could drop by 100,000 units to 240,000, a decent year of meeting replacement demand instead of expansion, Randall said.
"Even without a national program, we still see a lot of good infrastructure spending," Randall said. "States are still spending their money. And housing starts are good." Vocational trucks, which historically account for about 50% of Mack sales, could take a larger share.
"We have good order activity as we head into the first quarter for our full line across all Class 8 segments," he said. "There is strong pent-up vocational demand that plays right into our sweet spot."
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