Trelleborg, Sweden – Continued weak demand for agricultural and heavy-duty tires has prompted Trelleborg Wheel Systems (TWS) to keep production below the level of demand to adapt stock levels to the situation, according to Trelleborg AB president and CEO Peter Nilsson.
In addition, during the third quarter of 2019, TWS transferred production between facilities to meet new trading patterns and to create a better production structure for the future, Nilsson said in a results statement 24 Oct.
“Together, inventory adjustments and production transfers have contributed to temporarily reduced efficiency and increased costs, which will also impact the business area’s earnings during the next quarter,” the CEO noted.
Furthermore, Trelleborg said that TWS’s targeted activities relating to personnel “proceeded according to plan during the quarter.”
“The aim is to adapt the operation to the lower level of demand,” said the company without giving further details.
Trelleborg had previously announced plans to reduce the number of its employees by 700 people, mainly within its TWS and Trelleborg Industrial Solutions business areas.
Sales at TWS declined 6% year-on-year during the third quarter of 2019, as revenues from both agricultural tires and material handling & construction tires fell.
The trend, said the company, was negative in North America, unchanged in Europe and weaker in other geographic regions.
“The ongoing trade conflicts have had a negative impact on the business climate and contributed to increased uncertainty and reduced order intake,” Trelleborg’s third quarter report noted.