Layoffs Expected to Follow Truck Order Slowdown

Engine and truck makers are laying off or planning to lay off employees in anticipaiton of a truck sales slump.

Peterbilt, Detroit Diesel, International and Caterpillar have all announced intentions to layoff employees. The biggest layoffs will come at International, which outlined its cuts in August. The company was to lay off 1,100 workers at Midwest plants in Indianapolis and Springfield, Ohio. Most of the workers will be laid off from the company’s heavy-duty engine and truck manufacturing divisions.

Detroit Diesel told the state of Michigan it may layoff as many as 700 employees in October, but did not know at press time how many it would cut. Cuts will come from its on-highway division, the company said.

In Tennessee, union workers at Peterbilt’s Madison plant were locked out ahead of planned layoffs when the union’s contract ended without a new deal. Peterbilt already planned to layoff between 500 and 750 employees at the truck plant.

Many of the layoffs are related to low truck orders for the final quarter of 2002, when new, lower-emission engines will hit the assembly line. Fleets and owner-operators say they plan to avoid trucks with new engines as long as possible, citing concerns about price and reliability. Truck and engine makers, in turn, have been predicting a slowdown after October extending into 2003.

Caterpillar said it will lay off 470 full-time workers after Oct. 4 and will cut 290 temporary employees because of decreased demand in the company’s last quarter. Cummins also expects lower sales, but said at press time, it was premature to talk about any possible layoffs. Cummins recently announced an engine guarantee plan to spur sales.

Volvo said earlier this year it hoped to avoid any further cuts like the ones truck makers made during the last two years. Instead, the company said it didn’t plan to add any workers when orders were up before Oct. 1. Freightliner has been in the throes of a major reorganization including significant layoffs over the last 18 months.