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CNH Industrial Shuts American Plants, Withdraws 2020 View

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CNH Industrial N.V. (CNHI - Free Report) has suspended majority of its manufacturing operations in North and South America for a two-week period, starting Mar 30, on account of the coronavirus outbreak.

The affected sites in North America manufacture construction and agricultural equipment. However, most component facilities will remain operational at low speeds to ensure continued supply to the company’s other manufacturing facilities in North America — especially those deemed necessary by the U.S. Government. The North American parts depots and most distributor locations will also remain open for uninterrupted customer service. Further, CNH Industrial is working closely with the union leaders to enforce temporary shutdowns and plant reopenings.

Meanwhile in South America, the affected sites manufacture construction and agricultural equipment, commercial vehicles and powertrains. However, South American parts depots and the majority of dealerships will continue to provide service to customers uninterruptedly. Moreover, CNH Industrial is working closely with governments and union leaders to implement these actions.

CNH Industrial also withdrew the 2020 guidance amid significant deterioration of the macro-economic environment triggered by the coronavirus pandemic and subsequent market uncertainty. It will discuss its current-year outlook during the first-quarter 2020 earnings call, scheduled for May 6.

The company is evaluating necessary initiatives to slash costs and preserve financial flexibility in the face of rising market uncertainty due to the coronavirus crisis. It has $11.2 billion available in liquidity, providing a solid cash base and headroom within its credit facilities to tackle downturns caused by production shutdowns and revenue declines.

CNH Industrial currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

The coronavirus pandemic has become a concern for other global auto biggies as well, including Tesla (TSLA - Free Report) , Honda Motor (HMC - Free Report) , Toyota Motor (TM - Free Report) , Volkswagen AG, Goodyear Tire, Nissan, Harley-Davidson and Hyundai Motor. Several automakers have closed their factories and suspended production, while the others plan to change manufacturing processes and cut production levels in their plants, in line with the nation-wide campaign addressing the crisis. The pandemic has not only dented consumer sentiment and thwarted vehicle demand but also distorted the global supply-chain balance.

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