Paccar Inc. on Wednesday, April 11, confirmed news reports that it plans to lay off 10 percent of the work force at its Kenworth plant in Chillicothe, Ohio, in response to weakening orders. Paccar also makes Peterbilt trucks.
Wednesday’s Chillicothe Gazette reported that orders had dropped by about 10 percent recently, causing the company to scale back production at the central Ohio plant. A Kenworth spokesman confirmed the work force reduction but declined to reveal actual numbers of people employed at the plant or the number being laid off.
FTR Associates on April 4 released preliminary data showing March Class 8 truck total net orders were 32 percent below the same month of 2011 and reflect the third consecutive month-over-month decline in Class 8 orders. “There is no ‘good’ explanation for the weaker orders,” said Eric Starks, FTR president.
Starks said the weakness was “fairly broad-based” and not focused on one OEM. He said FTR sees fleets as “gun-shy” in pulling the purchasing trigger, as the recent runup in diesel prices is giving truckers food for thought before they place an order. “Right now, it is relatively easy to get a build slot, so there is little incentive to place orders for later delivery or to get in line,” he said.
Starks said the latest numbers also suggest that the proposed midyear OEM build increases are now in question. “We will still need to wait and see what happens in the next two months, but I don’t see anything that suggests a large uptick in orders is on the way,” he said.