 Few predictions about when the global economy will recover.
PHOTO: SHUTTERSTOCK |
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Materials handling companies worldwide are implementing cost-cutting measures to counter the effects of the global financial crisis, but no-one is predicting when the market will recover.
This week, Forkliftaction.com News reports that Toyota Industries Corp (TICO), the parent company of leading forklift brand Toyota, has experienced a 44% drop in net sales for the first quarter in its materials handling equipment segment.
TICO, in its investor relations report, attributes the decrease to "a significant decline in unit sales of forklifts, a mainstay product of this segment for the Toyota and BT brands, triggered by the global market contraction".
TICO’s subsidiary, Toyota Industrial Equipment Manufacturing Inc, the US manufacturing plant for Toyota forklifts, has already cut its Indiana workforce by about 15%. Early retirements, voluntary departures and performance-based cuts accounted for most of the staff reductions. The plant even imposed seven non-production days on the workforce in March and April (Forkliftaction.com News #416).
Competitor Linde Material Handling is also not immune from the shrinking forklift market. However, Manfred Höhn, head of communications, is upbeat, telling Forkliftaction.com News that while the global forklift market halved in the first half of 2009 compared to 2008, "sales and order intake for Linde are developing above market figures".
"In general, all truck segments and regions are impacted. Warehouse trucks are slightly less affected because they are often used in the food industry and in distribution and retail, which is more stable than the manufacturing industries," Höhn says.
Höhn explains that the German forklift giant’s prudence resulted in the manufacturer taking measures to anticipate the global economic crisis as early as in the northern hemisphere autumn of 2008.
He will not say when the global forklift market will improve, only that Linde "has laid all necessary foundations to deal with an upswing at any time".
Staff at Linde Material Handling’s Basingstoke plant in the UK were told in June that the forklift company would close the local production line in response to a 50% drop in demand. About 350 people will lose their jobs, but sales and marketing, after-sales and administration staff would remain (Forkliftaction.com News #415).
Dan Pettersson, vice president of Kalmar Counterbalanced Products at Cargotec, agrees that the global financial crisis has affected many markets and customer segments around the world: "The Asia Pacific area saw greater levels of activity than elsewhere in the world, but also in South America and Africa the order intake levels remained more stable."
Cargotec’s interim report for January-June 2009 show that Kalmar’s order intake totalled EUR411 million (USD591 million) for the period, 52% lower than in 2008. Sales totalled EUR588 million (USD846.4 million), 18% down from 2008.
Kalmar has closed its Ljungby plant and consolidated production in the Lidhult plant, reduced staff at its factories, implemented shorter working weeks and restructured its sales and service organisation to limit the effects of the crisis (Forkliftaction.com News #413).
In these competitive times, Pettersson says Stockholm-based Kalmar is focusing on being proactive and "supporting customers even better during these hard times, making sure we are there for them when the market improves again".
Despite the financial crisis, Kalmar is pressing on with its R&D activities to improve its product offerings and widen their range of applications. "We are constantly looking for opportunities in new and growing customer segments and a good example of this is the wind energy sector, where we have developed unique solutions for a number of big players. Further discussions with these and other customers in the wind energy sector are ongoing and will surely bear more fruit in the future," Pettersson says.
Pettersson says he can’t predict when the global economy will recover. "In today’s situation, the market is not functioning in a normal way. Decisions are being postponed and decision making and financing processes are being prolonged due to the economic uncertainty. Already we have a quotation backlog that during normal circumstances would result in a substantially higher order intake."
Over in China, E-P Equipment’s export business has suffered. Spokeswoman Sang Tian says while E-P’s forklift exports are down by 50%, its domestic sales and orders are stable.
Sang believes that the global financial crisis has hit the US and European markets harder "since those markets’ prior sales volumes are very high".
"Asia, Africa and South America are generally stable markets as their pre-financial crisis export volumes are low compared to the US and Europe," Sang says.
Meanwhile, the forklift manufacturer is trying to stimulate overseas and domestic demand by focusing on new product development, raising its quality control level, improving service levels and "waiting to catch the turning point".
"We don’t know [when the market will improve], but at least it won’t get worse. We believe we have reached the bottom," Sang says.
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