The continued spread of the Covid-19 pandemic is beginning to impact on construction and mining equipment manufacturer Caterpillar's supply chain, a possibility the company previously disclosed in February.
The US-based company indicated on Thursday that it was monitoring the situation closely and said that supply chain teams had been executing business continuity plans, which included using alternative sources and/or air freight, redirecting orders to other distribution centres, and prioritising the redistribution of the most impactful parts.
“Caterpillar is committed to continuing to execute these plans and will remain in close contact with its supply chain to monitor future possible implications, especially on production facilities,” the company assured.
Currently, Caterpillar said it would continue to run the majority of its US domestic operations and that it planned to continue operations in other parts of the world, as permitted by local authorities.
However, owing to uncertain economic conditions resulting in weaker demand, potential supply constraints and the spread of the Covid-19 pandemic and related government actions, Caterpillar announced that it would temporarily suspend operations at certain facilities.
The company added that it would continue to monitor the situation and cautioned that it could suspend operations at additional facilities as the situation warranted.
Caterpillar stated that its financial results for the first quarter and remainder of 2020 would be impacted by the continued global economic uncertainty associated with the Covid-19 pandemic.
As a result, Caterpillar withdrew its financial outlook for 2020 of January.
Caterpillar's first-quarter earnings announcement and conference call are scheduled for April 28.
The company asserted that its financial position remained strong. On a consolidated basis, Caterpillar ended 2019 with $8.3-billion of cash and available global credit facilities of $10.5-billion.