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Sales Downshift at Heavy Truck Makers

01.08.16 | Brian Baskin, The Wall Street Journal

Trucking companies are buying fewer vehicles amid lackluster demand for hauling freight, triggering job cuts among equipment manufacturers and leaving a near-record number of big rigs gathering dust on dealers’ lots.

Many of those unsold trucks were ordered months ago when the economy appeared to be heating up and carriers were expecting higher bookings from retailers and manufacturers. Instead, slower growth this fall spooked fleet owners into scotching expansion plans.

Heavy-duty truck orders plunged nearly 37% in December from the same month last year, according to data compiled by industry research firm FTR. Some carriers say they are waiting to see how much consumers spend over the holidays before committing to new vehicles, which can cost more than $150,000 each.

The sharp slowdown in truck orders is one of the clouds hanging over the economy heading into 2016. Trucking companies are holding back to see whether consumer demand pushes new expansion. That hesitancy has manufacturers of trucks and parts cutting payrolls and scaling back production, even as sales of passenger vehicles soar and the wider economy is adding jobs.

Daimler AG this week said it would cut about a third of its 3,100 workers at a Cleveland, N.C., Freightliner truck assembly factory. Rivals Volvo AB and Paccar Inc. recently disclosed workforce reductions at their U.S. factories. Navistar International Corp. reduced its staff by 1,400 in its fiscal year ended in October. Engine maker Cummins Inc. said in October it would cut 2,000 jobs world-wide.

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