Without interrupting product flow to dealers and customers, Komatsu Forklift USA will delay the start of forklift manufacturing in Newberry, South Carolina to April 2010 while closing Covington, Georgia production around mid-August.
Komatsu management emphasizes that plans for steady product flow are sufficient to satisfy market needs and that Komatsu is committed to the market, its customers and its dealers.
President Akira Yamakawa announced the delay in a 22 July memo to Komatsu USA dealer principals and sales managers.
"Our commitment to the North, South, and Latin America markets remains as strong as ever," Yamakawa notes. ""These tough decisions, based upon the current economic conditions and with our dealers' best interests in mind, will work to strengthen our market position as we go forward towards market recovery."
Komatsu has yet to see positive signs of market recovery and decided on the strategic delay to allow for better capacity absorption throughout the Komatsu America Corp organization under which Komatsu Forklift reports.
The plan to move the forklift production about 200 miles (320 km) to Newberry was reported in March
(Forkliftaction.com News #401).
As previously scheduled, Komatsu will move all production-related equipment from Covington in preparation for the start-up in April. In the interim, Komatsu will supply dealers and customers from built-up inventory and, if needed, from production in Japan. Komatsu will continue some dealer functions in Covington and gradually transfer other shared services to the Komatsu America operations.
Publicly traded parent company Komatsu Ltd of Tokyo reports a profit of USD50 million (JPY4.7 billion) on sales of USD3.39 million (JPY320.4 billion) for the first quarter ended 30 June. For Komatsu's industrial machinery segment, reduced fixed costs and a gain on reversal of allowance for doubtful receivables resulted in a profit for the quarter although the segment's profit and sales declined 39.7% and 49.5%, respectively, from the previous first quarter.