• Earlier this month, CNH Industrial announced it will invest nearly US$5 billion in U.S. manufacturing and R&D over five years while closing its Burlington, Iowa, assembly plant by mid-2026 due to declining demand and underutilization, affecting around 200 employees.

• This operational shift underscores CNH Industrial’s effort to realign its manufacturing footprint in response to changing market conditions and evolving demand for its machinery portfolio.

• Now, we’ll examine how the planned U.S. investment and Iowa plant closure influence CNH Industrial’s outlook for growth and operational efficiency.

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To be a CNH Industrial shareholder, one needs to believe in the company’s ability to enhance margins and earnings through manufacturing realignment, digital transformation, and a shift toward tech-enabled equipment, despite near-term cycles and market headwinds. The recent US$5 billion investment in US manufacturing and R&D, coinciding with the Iowa plant closure, reflects ongoing action on operational efficiency; right now, this move does not materially alter the primary short-term catalyst, which remains the recovery in North American ag machinery demand, and does not significantly change the biggest risk: weak end-market conditions and potential for margin pressure. Across this context, investors should continue to monitor how persistent destocking, volatile commodity prices, and slow market recovery could magnify earnings volatility in the quarters ahead.

Another announcement that stands out in the context of material risks is CNH’s recent completion of its digital manufacturing Accelerator Project in Belgium, which featured advanced AI quality control and flexible assembly. While separate from North American operations, this rollout hints at the company’s ongoing push to future-proof its production and drive process efficiencies, potentially helping counteract margin pressures and sluggish demand recovery in other geographies.

However, what investors should not overlook is the potential for lingering high inventory levels and aggressive discounting to impact…

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CNH Industrial’s outlook anticipates $18.7 billion in revenue and $1.6 billion in earnings by 2028. This projection is based on an annual revenue growth rate of 1.2% and a $777 million increase in earnings from the current $823 million.