Covid-19 pandemic hits Caterpillar supply chain

Image source: Caterpillar Inc.

Caterpillar (NYSE: CAT) announced this week that the continued spread of covid-19 is starting to impact its supply chain.

Caterpillar said it is continuing to run the majority of its US domestic operations and plans to continue operations in other parts of the world but is temporarily suspending operations at some facilities in affected areas.

In February, Caterpillar said its machine sales dropped 11% on a rolling three-month period. Isolating the Asia-Pacific region, sales fell 17% - the largest drop in four years.

"The company is monitoring the situation closely and supply chain teams have been executing business continuity plans, which include, but are not limited to, being alert to potential short supply situations, and, if necessary, utilizing alternative sources and/or air freight, redirecting orders to other distribution centers, and prioritizing the redistribution of the most impactful parts," Caterpillar said in a media release.

Caterpillar said its financial position remains strong. On a consolidated basis, the company ended 2019 with $8.3 billion cash and available global credit facilities of $10.5 billion.