Commercial Vehicle Crushed Under Covid-19

The COVID-19 pandemic has made life difficult for almost everyone, and it has made an already-challenging situation at Commercial Vehicles (CVGI) that much worse. While 2020 was never going to be a strong year given the cyclical downturn in the truck industry, the sudden, severe disruption to production has created even greater challenges for a company that wasn’t in particularly strong shape heading into this downturn.

While COVID-19 is likely to intensify the downturn that was already happening in CVGI’s primary markets, these markets will recover in time. I do expect the company to participate in that recovery, but there are other, longer-standing issues to consider here, including a chronic inability for the company to meaningfully expand its business into attractive new opportunities or generate better than low single-digit FCF margins.

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Commercial Vehicle Crushed Under Covid-19