As equipment manufacturers stare into the second half of 2009 and see 30% to 50% fewer annual sales, a “Cash for Clunkers”-style program for dozers, backhoes and excavators may be just what the economy ordered. Or is it? Suppliers say they have been kicking the idea around internally since C4C started winding down this month. This year’s American Recovery and Reinvestment Act has done little to shore them up: Peoria, Ill.-based Cat alone has shed 34,000 jobs since late last year, it says.
“Misery loves company, but it is still misery,” echoes Ron DeFeo, chairman and CEO of Westport, Conn.-based Terex Corp. In the second quarter, Terex booked a net loss of $77.6 million on $1.3 billion in revenue with 55% fewer sales, in part forcing it to close its plant in Cedar Rapids, Iowa, which opened in 1923. It employed 170 workers. Globally, manufacturers this year have lost $25 billion in sales, “a car company’s worth of revenues,” DeFeo notes. Some categories, such as aerial lifts, are off a ghastly 80%.