The coronavirus pandemic has caused many dealers to update their business operations to comply with social distancing recommendations to protect customers, employees, and partners. Many dealers are encouraging customers to call ahead and place orders by credit card so dealers can load customers' trucks for them or so dealers can arrange for curbside delivery.
The ongoing health crisis is also affecting how industry manufacturers and producers are conducting business, causing many to curtail production temporarily.
Weyerhaeuser is expecting to reduce operating capacity by approximately 20% for lumber, 15% for oriented strand board, and 15% to 25% for engineered wood products through a combination of mill curtailments and reduced shift postures through April. President and CEO Devin Stockfish said the wood products manufacturer has taken “significant steps to protect the health and well-being” of employees and that “safety will remain the top priority” in the decisions the company makes in the near-term future.
Weyerhaeuser is also planning to reduce 2020 capital expenditure by approximately $70-90 million and increasing cash on hand by $550 million through a draw on its revolving credit facility.
Door and window manufacturer JELD-WEN has temporarily suspended production at locations that cumulatively represent less than 10%, or $5.7 million, of its 2019 consolidated net revenues. In many jurisdictions, the company’s products and services fall into categories that have received an “essential business” or “life-sustaining” designation. The manufacturer has implemented policies and procedures to maintain safe working environments and reduce associates’ possible exposure to the coronavirus.
“We are taking significant austerity measures to preserve cash and address near-term market dynamics,” president and CEO Gary Michel said in a news release. “The strategic actions we have taken with our footprint rationalization and modernization program along with the Jeld-Wen Excellence Model, our business operating system, strengthen our position in a volatile market environment and prepare us to deliver long-term value creation once the COVID-19 pandemic subsides.”
LP Building Solutions is cutting OSB production by at least 100 million square feet in April through a combination of curtailments and reduced schedules. The company said this approach is designed to maintain agility for further adjustments as demand warrants and to minimize the impact on employees. The manufacturer reduced its 2020 capital expenditure plans by 50% to roughly $70 million for the year and the company is “closely scrutinizing” all discretionary spending.
Several Canadian producers with operations in the United States have taken steps to temporarily curtail production in response to the coronavirus. Canfor Southern Pine operations are reducing capacity in the United States by approximately 40%, or 50 million board feet, over a four-week period through the end of April. The company is achieving these reductions through the implementation of variable shift schedules and reduced operating hours. Interfor, which has operations in British Columbia, the Pacific Northwest, and the southern region of the U.S., is curtailing production by approximately 60% through the first week of April. West Fraser is reducing production at its mills in the southern U.S. by approximately 24% and is shutting down its plywood production “until at least April 6.”