Coronavirus: Big three of machinery world respond to crisis

Caterpillar, Komatsu and Hitachi put business continuity measures in place amid suspension of work in some global sites and take steps to ensure safety of employees and customers

Caterpillar, Komatsu and Hitachi, three of the biggest construction equipment manufacturers in the world, have taken several measures to deal with the Covid-19 crisis and keep as much of their production and services active as possible.

In separate statements, the machinery giants said the measures include suspension of production at certain plants around the world in the worst affected countries and reopening of some facilities elsewhere, while a few production sites have been kept open.

Both Komatsu and Hitachi have said that their factories in Japan continue to function as before. Hitachi Construction Machinery said in statement that the Covid-19 outbreak has “affected its production activities globally”, although its “seven plants in Japan are operating normally”.

“The restrictions on movement and social distancing measures by governments has made it difficult to continue production activities as usual”, said Hitachi, while giving details that work has been suspended at its Russian plant and its two plants in India.

Adjustments have also been made to the production in its facility in the Netherlands as per measures by the Dutch government and availability of manpower. Meanwhile, Hitachi’s seven sites in Japan are functioning as normal, as its plant in Indonesia. Production has also resumed at its China facilities with all lines becoming operational.

“Under these circumstances… people’s lives around the world have been affected. The entire Hitachi Construction Machinery Group will cooperate in order to successfully implement measures to prevent the spread of Covid-19 and to resolve the confusion as soon as possible,” Hitachi’s added in its statement.

Komatsu ha also said it is temporarily closing its manufacturing facilities in Europe, Brazil and India, while its Japanese production bases continue to function, as do those in China, which started to be gradually reopened in late February as the worst of the crisis passed in the country.

“In response to the policies of different governments, we…are working to prevent coronavirus from spreading, (placing) top priority on the health and safety of customers, local communities, and employees,” Komatsu said.

“In compliance with the policies, some manufacturing plants of the Komatsu Group are going to halt production temporarily…At business bases in operation, we are implementing a wide range of countermeasures, including fever checks, the use of face masks, flex commuting, the prohibition of business trips, and teleworking.”

Komatsu’s German plant is closed from April 4 to 13, its UK factory from March 30 to April 17, and its plant in Brazil from today to April 21. Meanwhile, Its Indian factory was earlier closed from March 24 to 31 and the Italian facility from March 26 to April 3. It is unclear whether these two sites have been reopened given that both the Indian and Italian governments have extended the lockdown and restrictions in their respective countries.

Adding that it was working on global cross-sourcing and procurement of finished machines and parts to absorb the impact of changes in demand and exchange rates, Komatsu added: “Although we are planning to halt production at some manufacturing plants, there are no critical effects on Komatsu Group’s production for FY2019, due to alternative procurement and inventory reallocation.”

Earlier, Caterpillar said the pandemic had impacted its supply chain, although it continued to run much of its US operations and those in other parts of the world, wherever permitted.

“Due to uncertain economic conditions resulting in weaker demand, potential supply constraints and the spread of the Covid-19 pandemic and related government actions, Caterpillar is temporarily suspending operations at certain facilities. The company will continue to monitor the situation and may suspend operations at additional facilities as the situation warrants,” said Cat in a statement.

Business continuity plans were being executed, including the use of alternative sources for parts, redirecting orders to other distribution centres and prioritising the redistribution of the most important parts, said Cat. The company added that while the crisis has impacted its business, its extent “cannot be reasonably estimated at this time due to the rapid development and fluidity of the situation”.

The company has, however, withdrawn its financial outlook for 2020 and said further details will be available when it announces its first-quarter results in April 28. Cat has also implemented preventive measures at its sites worldwide, including increased frequency of cleaning and disinfecting of facilities, social distancing practices, remote working when possible, restrictions on business travel, cancellation of events and limitations on visitor access to facilities.



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