Caterpillar is reducing its production and has withdrawn its 2020 guidance due to the economic effects of COVID-19, the company announced on Friday.
The plate consumer and heavy equipment producer said its supply chain has been disrupted but it is running most of its US domestic operations. It plans to continue operations at global locations, as allowed by local authorities. However, it has decided to temporarily suspend operations at some of its facilities because of the economic uncertainty, reduced demand and potential supply restrictions arising out of the COVID-19 pandemic and related controls imposed by governments.
The company did not provide details on which facilities would be closed or ramped down, or the additional facilities that could face similar measures if the need arises. According to media reports, Caterpillar’s cast metals foundry in Mapleton and its engine manufacturing facility in Lafayette are among the first facilities to be shut down.
The company noted it will continue monitoring conditions that have been fluid and developed rapidly thus far.
It also canceled its 2020 guidance citing the scale of the pandemic which made it hard to determine its level of impact on business, financial position, operational outcomes or liquidity.
The company finished 2019 with $8.3bn in cash and $10.5bn of available global credit facilities. The company is scheduled to release its Q1 2020 earnings on April 28.