Kobelco Construction Machinery Co. Ltd.’s (KCM) decision in mid-February to temporarily suspend production of hydraulic excavators in North America effective May 1 will impact at least 100 employees at the Kobelco Construction Machinery U.S.A. Inc. (KCMU) production facility in Spartanburg County, SC. The company announced it would temporarily halt production at the plant in Moore, SC, due to a delay in the acquisition of 2021 EPA emissions certification by its engine supplier, Hino Motors, Ltd.
According to Channel 7 News (WSPA.com), KCMU has been a presence in Spartanburg County for five years and had seen its sales skyrocket during that time; it produced 600 models of excavators in 2020. The facility has approximately 160 employees, and more than two-thirds will face layoffs if the EPA approval isn’t forthcoming in the near future.
On February 17, KCM announced the suspension of production of excavators for North America after it was informed by its engine supplier, Hino Motors, Ltd. of a delay in EPA emissions certification for its 2021 model year J05E, J08E, P11C and E13C engines, “with no clear outlook on future supply schedule.” Following notification of the delay, KCM judged that production of hydraulic excavators equipped with the relevant engines would be difficult, and chose to temporarily halt production at the Spartanburg plant.
Seven models of hydraulic excavators produced and shipped from the plant are affected: the SK170LC, SK210LC, SK260LC, SK300LC, SK350LC, SK390LC and SK500LC. The engines undergoing the certification process are also used in six models manufactured in Japan and supplied to North America. These include the SK210HLC, SK230SRLC, SK270SRLC, SK380SRLC, SK500LC and SK850LC. Four models of crawler cranes produced at KCM's Okubo factory are also affected: the CK850G, CK1100G, CK1200G, CK1600G and CK2750G.
Production at in Spartanburg will remain halted until the supply of engines is resumed at an undetermined date. KCM plans to continue sales of models not impacted by the suspension, including various mini-excavators, 7- to 13-ton class excavators and the CK3300G crawler crane, as well as aftersales service for machines already delivered. In addition, the company is considering installation of an alternative engine during the supply disruption.
The Spartanburg County Council plans to host job fairs for employees affected by the production shutdown as needed.
Engine supplier Hino Motors is facing a slew of challenges as a result of the delay in EPA certification for new engine models. Hino, the heavy truck manufacturing division of Toyota Motor Co., also announced a “formal pause” in North American truck production at a December 23, 2020, meeting of its board of directors, citing “challenges” in the required U.S. engine certification testing process for new model year A09C, J08E and J05E diesel engines for North American truck models. Production is expected to be suspended through October 2021.