So here’s what I hear- WNC has essentially run out of orders for dry vans. Pretty much the only thing that they will be building in November will be reefers. Right now the plan is to be shut down in Lafayette for most of December.

They are hoping that they will get to a build rate of about 12,000 trailers for the year. Management claims that the cash burn rate is down to “a coupe million” dollars per month, but most people in the industry believe that they will show an operating loss of at least $5 million per month when they report earnings tomorrow.

As far as competitors, Utility is now the low price leader for both dry vans and reefers. They have all but said that they are undercutting prices with the goal of putting WNC out of business.

Great Dane is busy building UPS trailers among other things. Hyundai underbid WNC to get the PBL business. Vanguard is busy building Vitran dry vans and Stoughton and Strick have production sold out for the rest of the year with limited production rates.

The big picture is that the reefer business remains relatively strong, but pricing has fallen off a cliff especially since CIMC/Vanguard is now making a big push in this area. Dry van business remains weak and pricing remains awful for manufacturers. With tens of thousands of dry vans still parked throughout the country, 2010 will probably look a lot like 2009 for manufacturers.

I believe that a best-case scenario for WNC would be to build 10,000-12,000 trailers in 2010 with losses in the $50-$70 million range. Of the course the worst-case scenario is much worse.

It’s no secret that the only way things will improve for the trailer manufacturing industry will be if someone big goes under and it’s also no secret that WNC is the only company where this is a realistic possibility (which is sad and get’s into issues of foreign vs. US companies, but that’s a whole different story).

Here’s the real question- will Lincolnshire put up more money to continue to fund WNC’s losses, which would all but ensure another miserable year for trailer manufacturers? Or will they get out before they really get themselves in deep, which would bring industry capacity much more in line with demand?

Regardless, I can’t imagine a scenario where common stock holders of WNC will ever see their shares worth more than they are today. Lincolnshire is now calling the shots and they are looking out for Lincolnshire, not the common stock holder.