News story

Warren sees MCFA deal benefiting Jungheinrich

Thursday, 10 September 2009 ( #427 ) - Fairview, OR, United States
The North American agreements between Jungheinrich AG and Mitsubishi Caterpillar Forklift America Inc (MCFA) are "a good move for Jungheinrich", according to Robert Warren, president and chief executive officer of attachments manufacturer Cascade Corp.

"They are teaming up with a much stronger partner" in North America where Jungheinrich has less than 2% marketshare, Warren observes. "It could be an opportunity (for Cascade) as we have a good working relationship with (Jungheinrich) in Europe."

The manufacturing and marketing agreements were disclosed on 12 August and will be implemented in 2010 (Forkliftaction.com News #423). MCFA will distribute Jungheinrich-branded warehouse products in the United States, Canada and Mexico; Jungheinrich will design new North American market products that MCFA will manufacture; and Jungheinrich will supply some Class 1 products for sale under the Cat forklift brand and Class 3 products for sale under the Mitsubishi brand.

Warren ponders the implications for Cascade: "Is it an expanded opportunity? I don't think it is really going to affect us at all. We have a very good relationship with Mitsubishi already. We have good relations in the market sectors that Jungheinrich is focused on. We already have good relations with their competitors. It could just be a shift of potential marketshare, and that is certainly what Jungheinrich is aiming for. We would expect to get market share from that."

Warren made the remarks during a 3 September conference call with financial analysts following filing of Cascade results for the second fiscal quarter ended 31 July.

Cascade reports a loss of USD12.3 million-including USD11.6 million of European restructuring costs-on sales of USD76.6 million for the recent quarter versus profit of USD10.5 million on sales of USD150.1 million for the comparable previous-year quarter.

The restructuring primarily involves steps to cease production activities at a Cascade attachment facility in Almere in the Netherlands by the end of October 2010. Warren hints at further restructuring but declines to "get into specifics until it is announced with our facilities". Cascade has 27 facilities in 16 countries.

Cascade attributes the lower sales to the decline in global economic conditions and a weak global forklift market.

"Our sales decreases by region are relatively in line with regional lift truck shipment statistics in the second quarter," notes Joseph Pointer, Cascade chief financial officer. "The only region that shows a variance worth commenting on is the 20% decrease in lift truck shipments in China as compared to a sales decrease of 39%. (Forklift) industry shipments for China reflect only domestic (forklift) sales. Although published statistics are not available for the export market, our best estimate is that the market is down at least 75% from the prior year. Factoring in export shipments of lift trucks, the decrease is more in line with our sales decrease, which reflects both domestic and export sales."

Warren says Cascade continues to plan on a lag in the capital goods markets extending past 31 January 2011 and into the firm's 2011 fiscal year "before a real recovery begins to take shape."

Fairview-based Cascade employs about 1,900 staff and primarily manufactures devices allowing forklifts to carry, position and deposit various types of loads.
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