MACUNGIE, Pa. – The financial impact of the United Auto Workers (UAW) union strike against Mack Truck, which began October 13 and involves about 3,500 workers in Pennsylvania, Maryland and Florida, cannot yet be determined. What Volvo Group, the parent company of Mack, can determine is that the future, in terms of truck orders, will be considerably more bleak than the recent past.
Volvo Group President and CEO, Martin Lundstedt, explained the situation in the company’s third quarter 2019 report. “For our truck operations, the trend from previous quarters with improved profitability but also with a decline in order intake continued in Q3," he said.
Continued Lundstedt, “During the last couple of years, customers in Europe and North America have renewed and expanded their truck fleets, but with freight volumes having leveled off and with the current uncertainty about the future economic development they are now holding back on investments."
“During Q3, we continued to reduce our production volumes and further adjustments will be implemented in coming quarters. For 2020, we expect markets to come down to more normal replacement levels in both Europe and North America.”
Lundstedt also announced the creation of a new business area, Volvo Autonomous Solutions, which will focus on developing, commercializing and scaling up autonomous solutions across Volvo Group. The new business area is a result of the growth of connectivity, electrification and automation which bring customers increased uptime, better safety and improved efficiency.
Third Quarter and Nine Month Results
Mack Truck orders in the third quarter declined 55% compared to the third quarter of 2018 and compared to a 45% decline in Volvo Group’s worldwide truck sales. For the first nine months of 2019 Mack orders declined from 23,163 in 2018 to 10,547 in 2019, a decrease of 54%.
On the positive side, during the same periods Mack was busy increasing deliveries from the orders placed in 2018 and 2017. Deliveries in the third quarter were 6,845 compared to 6,076 in the third quarter of 2018, an increase of 13%. Deliveries were up 29 % in the first nine months of 2019, from 17,336 to 22,414. These delivery numbers compared favorably to Volvo Group’s worldwide results, which declined 1% in the third quarter and increased just 7% for the first nine months.
As a result of the increase in deliveries, Mack’s market share in the third quarter increase to 6.8% from 6.6% in the previous year.
Worldwide, the Volvo Group experienced a good third quarter of 2019. Net Sales were up 7% compared to the third quarter of 2018 and 15% for the first nine months. Operating income increased 6% in the quarter and 30% for the first nine months of 2019 compared to the same period the previous year.
Mack Truck is one of North America’s largest manufacturers of heavy-duty Class 8 trucks, engines and transmissions. Founded in 1900, Mack Trucks are sold and serviced in more than 45 countries. Mack is part of the Volvo Group, headquartered in Goteborg, Sweden, one of the world’s leading manufacturers of trucks, buses, construction equipment, marine and industrial engines.