Genie aggressively controlling inventory

WESTPORT, Conn. — While sales of lifts and aerial work platforms are slowly improving, executives with Terex, the parent company of Genie, said the company has reduced production to keep pace with market demand in order to keep inventories small and control costs.

Speaking during the company’s third-quarter earnings conference call Wednesday, Terex President and CEO John Garrison said the company has reduced its lift inventory by 47 percent, or $290 million, “to 2016 levels” and has adjusted production “to meet customer demand.”

“We are aggressively managing aerial production levels to ensure we don’t produce excess inventory,” added Terex Senior Vice President and Chief Financial Officer John “Duffy” Sheridan.

Terex, which makes lifts, cranes, construction towers, cement mixers and road stripping equipment, saw sales of lifts and aerial work platforms, or AWPs, fall by $445 million, or 29 percent, in the third quarter of 2020. However, orders for new AWPs reached $404 million during the same period, 10 percent higher than the third quarter of 2019, Sheridan said.

Garrison added that so far, there have been no delays or cancellations in those orders.

Sheridan said the company is reorganizing its AWP sales and production teams “to increase the ease of doing business” and is looking at ways of making permanent cost cuts enacted specially at Genie at the start of the COVID-19 pandemic.

“We are controlling what we can control,” he said.

Garrison added that the company has also restructured how it purchases goods for production and “is working with fewer suppliers” and is trying to make its workforce as flexible as possible.

“It’s about the appropriate level of inventory,” he said. “We’re not against having inventory.”

According to the Grant County Economic Development Council, Terex’s Genie subsidiary brand is one of the largest private employers in Grant County.

Terex reported a net profit of $22 million, or 31 cents per share, on sales of $765.6 million for the third quarter of 2020. The company’s operating profit for the period was reduced by $8 million “due to severance and restructuring” costs, Terex reported.

Charles H. Featherstone can be reached at [email protected].