Accuride Corporation's CEO Discusses Q2 2012 Results - Earnings Call Transcript
We did have some challenges in the second half. We started to experience some near-term net order weakness, which are causing OEMs to reduce their second half production schedules. Although now operation is stable, the Imperial consolidation has been delayed by about six to eight months. We’ve put it on hold for about 60 days till we get the plant down in Texas that we control and we’ve modified some of the building construction that need to be done. So that’s been the jag in our performance in the first half of the year but that would get much better in the second half.
Demand for aluminum wheels in the quarter continued to remain strong, our plants were running seven days a week all quarter long. Our new capacity, we’ve gone up about 5,000 wheels a week in the last six weeks and we’re going to add about another 5,000 wheels a week coming forward to next six weeks. So we’re going to get ahead of the capacity, a situation there for the first time in over two years.
We do continue to experience soft aftermarket demand in Gunite, mostly as impact of offshore pricing and we’ll continue to take a look at that whether we needed to take some actions to address some potential dumping issues on that side of the house. Let me switch gears and let’s talk about the overall industry fundamentals, okay. Overall, if you take a longer term look, the fundamentals are pretty strong.
GDP here in North America is expected to grow between 2% and 2.5% annually. Historically the fleet is at an all-time age of about 6.7 years on the tractors and over eight years on the trailers. Even if you adjust out the low miles in the currently 2008, 2009 the overall tractor was about 6.4 years old right now. Fleet utilization rates continue to run north of 90% so they are starting them to get some wear and tear. In the bottom line is the fleets are also making money and have the ability to invest in new trucks to replace the aging fleet at the time they want to.
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