Kobelco Construction Machinery to suspend U.S. excavator plant

Kobe Steel, Ltd. announces that its wholly owned subsidiary, Kobelco Construction Machinery Co., Ltd. (KCM) has decided to temporarily suspend the production of hydraulic excavators at the U.S. plant of its U.S. subsidiary Kobelco Construction Machinery U.S.A. Inc. (KCMU) in Spartanburg County, South Carolina, USA, from May 1, 2021.

KCM received a notice from Hino Motors, Ltd. in mid-January that there has been a delay in the certification of the new model year engines^*1) to be supplied to KCMU's hydraulic excavators for the North American market due to a problem in the process of achieving EPA emission certifications, with no clear outlook on future supply schedule.

After receiving the notice, KCM examined the impact on the production and alternative measures and reached the decision to suspend the production at the KCMU’s Spartanburg plant as it was considered difficult to continue the production of the hydraulic excavators equipped with the relevant engines^*2).

The following seven models to be produced at and shipped from the KCMU's Spartanburg plant will be subject to the suspension of production. For hydraulic excavators equipped with certified engines, sales will be suspended once the present stock has run out.

The engines that are undergoing the certification process are also used in some models manufactured in Japan and supplied to the North American market, which include hydraulic excavators (produced at KCM’s Itsukaichi factory) and crawler cranes (produced at KCM’s Okubo factory). The production of the following models will be temporarily suspended once the present stock of the certified engines has run out.

Production at the KCMU’s Spartanburg plant will be suspended from May 1, 2021 until the supply of engines is resumed (date undetermined).

We are currently examining the impact of the suspension of production and sales on our business results. We will promptly make an announcement when any matters to be disclosed arise in the future.

During the suspension of production, KCM will continue its business in North America for the sale of models other than those subject to this suspension, which include various mini-excavators, 7 ton/13 ton class hydraulic excavators, and the crawler crane CK3300G, and after-sales service for machines already delivered. We are considering installing an alternate engine for the models affected by this supply disruption. We strive to resolve this issue as soon as possible.