Caterpillar responds to crisis

26 March 2020

Caterpillar said on 26 March that the COVID-19 pandemic was starting to impact its supply chain, although it continued to run the majority of its US operations and in other parts of the world, where permitted.

Production at some facilities is being suspended, said the company; “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.”

Caterpillar

Cat said it was executing business continuity plans, including the use of alternative sources for parts, redirecting orders to other distribution centres, and prioritising the redistribution of the most important parts.

It said the pandemic could have a material impact on the business, “but [the impact] cannot be reasonably estimated at this time due to the rapid development and fluidity of the situation.

”It will be determined by the duration of the pandemic, its geographic spread, business disruptions and the overall impact on the global economy.”

The US manufacturer – the world’s largest construction, mining and power equipment supplier – said it was withdrawing its financial outlook for 2020 and that further updates would be given in its first-quarter earnings announcement on 28 April.

Cat said it was implementing several preventive measures relating to COVID-19, such as increased frequency of cleaning and disinfecting of facilities, social distancing practices, remote working when possible, restrictions on business travel, cancellation of certain events and limitations on visitor access to facilities.

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