Marmon Highway Technologies companies will increase prices immediately to deal with skyrocketing global metals costs, MHT President Kelly Dier announced Thursday, April 10. MHT says its companies will communicate with their respective customers about specific actions in response to the steep, rapid increase in metals prices.
MHT companies, under many well known brands – Fontaine, Webb, Leland, Perfection, Triangle, Fleetline, Nuline and Hogebuilt – engineer, manufacture and supply a broad range of products to the highway transportation industry, including brake systems, transport trailers, fifth wheels, leaf springs, spray suppression equipment, specialty drive axles, truck modifications and clutches.
Metals are the primary raw material in virtually all products supplied by MHT companies and constitute a high percentage of the total production cost. Since January, metal prices have increased at previously unseen rates, according to MHT; scrap prices alone increased $243 per ton or 88 percent in the first quarter, and on April 1, scrap bundles sold at an increase of $155 per ton.
MHT says over the last several years, its companies have applied lean operating principles throughout their businesses, and these efforts have reduced production time from weeks to hours and minutes, resulting in substantial savings for MHT customers. Overhead costs as a percentage of sales have been reduced substantially, according to the company.
MHT says that until now, these continuous efficiency improvements have allowed its companies to absorb portions of the ongoing rise in metals prices. However, MHT says the severe and rapid escalation in metals prices now requires its companies to recover these greatly increased costs and the additional expenses needed to support increased accounts receivable and inventory investment.
Dier notes that if this unprecedented increase in metals prices proves to be speculation-driven, creating a pricing bubble, MHT companies will act quickly to make the appropriate adjustments. “These immediate actions are essential to allow us to continue our long history of providing innovative products and unsurpassed service,” Dier says. “As the technology leader in our product categories, we are absolutely committed to research and development that will continue to reduce weight, improve product performance and deliver market-leading value to meet the needs of our customers.”