International could face Q4 loss, says Traton CFO as tariffs hit U.S. truck production
Key takeaways
- International Trucks may post a Q4 operating loss due to tariffs, lower freight demand, and cost pressures.
- Shifting production to U.S. plants helps absorb some tariff costs for medium-duty and vocational trucks.
- Traton is managing expenses through project delays, hiring freezes, and technology cuts to protect profitability.
International Motors could post an operating loss this quarter, the top financial executive of the manufacturer’s parent company Traton SE said October 29.
Speaking after Traton, which also owns the Scania and MAN truck brands as well as Volkswagen Truck & Bus, reported its third-quarter results, Michael Jackstein said International teams are battling the impact of both slack demand from fleets and, more recently, the effects of various Trump administration tariffs. But there’s a chance that International—which last year produced roughly $740 million in operating profits—will put up red numbers in the last 90 days of this year.
“I cannot rule out that we end up in a loss-making situation. That’s a candid, direct answer,” Jackstein said, who added that the company has been using surcharges to help recover tariff costs. “But because we had the tariff also regarding steel and aluminum kicking in with 50%, we were […] not able to offset tariffs to the full extent in the third quarter. And now when we move and look ahead towards the fourth quarter, of course, the tariffs on steel, aluminum; they remain.”
Jackstein said Traton has moved some production work for medium-duty and vocational trucks to International’s U.S. plants from Escobedo, Mexico, where the company makes most of its Class 8 trucks. That is helping the business better absorb some of the tariff-related costs.
See also: Traton cuts shift, 900 jobs in Mexico
Technically, International also posted an operating loss in the third quarter, but that was due to needing to book a one-time charge of about $150 million to account for the end of an electric-truck development project. Backing out those costs, the business would have earned an operating profit of some $17 million on sales of about $2.1 billion.
That last sales figure was 17% smaller than the second quarter’s and only about half that of the third quarter of 2024. But that comparison looks worse than it would under ordinary circumstances because International’s sales in 2024’s Q3 were artificially inflated by the company catching up to sales it missed earlier in the year due to a mirror supplier’s production snag.
Still, comparing 2025 to the six quarters prior shows the impact of the freight recession and tariff volatility on sales: This year’s three-quarter average is 12,694 compared to more than 19,300 from mid-2023 to last December.
Speaking to the recently announced Section 232 tariffs on medium- and heavy-duty trucks and parts (which will go into effect Nov. 1), Jackstein said his teams are still assessing the potential costs to International and Traton. For now, he said, they will be in the “mid-double-digit” range for the fourth quarter, but he added that analysts and investors shouldn’t simply multiply Q4’s number by four to project the impact on 2026.
“It’s quite obvious that there is a substantial impact next year,” he said. “But I would be really hesitant at this point in time because we are really looking into various options and possibilities and calculations […] Also, we have to get a better understanding here with the administration.”
Traton as a whole sold more than 54,900 trucks around the world during the third quarter, down from nearly 64,000 in the spring and almost 73,000 in 2024’s third quarter. That produced operating income of about $540 million on total sales of $12.1 billion. Executives said that they’ve been looking to manage costs by—as in the case of International’s electric program—postponing or calling off projects, trimming technology spending, and freezing hiring, among other things.
Shares of Traton (Ticker: TRATF) rose nearly 3% after the executives’ report and conference call. Over the past six months, they have lost about 5% of their value.
About the Author
Geert De Lombaerde
Senior Editor
A native of Belgium, Geert De Lombaerde has more than two decades of experience in business journalism. Since 2021, he has written about markets and economic trends for Endeavor Business Media publications FleetOwner, Healthcare Innovation, IndustryWeek, Oil & Gas Journal, and T&D World.
With a degree in journalism from the University of Missouri, he began his reporting career at the Business Courier in Cincinnati. He later was managing editor and editor of the Nashville Business Journal. Most recently, he oversaw the online and print products of the Nashville Post and reported primarily on Middle Tennessee’s finance sector and many of its publicly traded companies.