The Manitowoc Co. last week announced that as a result of recently identified supplier delivery issues with certain hydraulic components, the shipment of some crane products will be delayed into the first quarter of 2012. In addition, the company announced to the financial community that the International Association of Machinists Local 516 workers at its Manitowoc Cranes facility in Manitowoc, Wis., have been on strike since Nov. 14. The previous contract expired Oct. 31. Negotiations held in front of a federal mediator recently did not result in meaningful progress, leaving management uncertain on how long the strike will continue.
Manitowoc expects the negative financial impact of the component delivery matters, coupled with the IAM strike, corresponding layoffs, and contingency plans, to negatively affect fourth-quarter crane sales and operating earnings by approximately $35 million and $10 million, respectively. In addition, the timing of cash collections caused by production disruptions and inefficiencies is expected to result in the company’s debt reduction being near or below the low end of its previously announced $150 to $200-million target range.
As an update regarding customer order activity, the company disclosed that order flow remained at levels consistent with the rate of the prior four quarters.
“With the exception of the crawler crane product line that has remained relatively soft, we are pleased with the order activity in other product lines in most markets,” said Glen Tellock, Manitowoc's chairman and CEO. “In addition, our Foodservice business continues to perform well, and in accordance with the guidance we provided in our third-quarter earnings announcement.”
The Manitowoc Co. is one of the world's largest providers of lifting equipment for the global construction industry, including lattice-boom cranes, tower cranes, mobile telescopic cranes, and boom trucks. It also manufacturers commercial foodservice equipment.
