Navistar’s Springfield plant is important to the truckmaker, but new jobs won’t come here until the manufacturer regains some of the business it lost after struggling with engine technology a few years ago, the company’s leader said Thursday.
The truckmaker has become more financially stable in the past year and those results are expected to continue, said Troy Clarke, Navistar’s CEO and president.
Clarke visited the Springfield facility Thursday and talked to employees about the status of the company. Navistar is one of Clark County’s largest employers with more than 1,100 workers and thousands of retirees in the area.
“We did set rather lofty objectives and we’ve been able to accomplish that,” Clarke said of the company’s progress.
Clarke took over as CEO at Navistar in 2013 after a long career at General Motors. The company was in turmoil when he took over after the U.S. EPA rejected its engine technology, saying it didn’t meet emissions standards. The company lost market share as a result, and has slowly worked to rebuild its image and profitability.
Navistar lost $297 million in its most recent quarter, but analysts saw encouraging signs, including increased sales. To stabilize the business, Navistar slashed costs, including closing a facility in Garland, Texas, and moving the work to Springfield.
It also eliminated hundreds of corporate jobs and announced earlier this year it would move production of its MaxxForce mid-range engines to a single site in Melrose Park, Ill. That decision meant moving production out of a facility in Huntsville, Ala., resulting in the loss of about 280 jobs.
To keep enough cash to run the company, Clarke said Navistar also put development of some new products on hold.
“We basically put anything on a pause that was going to consume cash before it was going to produce cash,” he said.
Springfield has fared well despite those challenges, increasing from as few as 300 workers in 2010 to about 980 union employees this year. The Springfield facility can continue to play an important role in the company’s recovery, he said.
“There’s really no reason we can’t be successful here,” Clarke said.
Navistar is currently in negotiations with members of the United Auto Workers Local 402 in Springfield, and will begin talks with the union at the national level later this year.
The relationship with the company’s workers and top management is better than it had been in the past, and both sides are making progress in negotiations, said Jason Barlow, president of the UAW Local 402.
“Both sides are discussing the issues we feel are important for our membership and Springfield and we have up until Oct. 1,” he said. “I feel that we’re making decent headway.”
Clarke has visited the Springfield facility four times in the past year, Barlow said, while the previous CEO had only visited the site once in the past 10 years.
Most employees are more optimistic at the direction the company is taking, Barlow said.
“They’re making cost reductions at all levels of management and not on the backs of labor,” he said.
Since taking over, Clarke said the company has put an increasing focus on finding ways to support workers on the assembly line with training and additional equipment.
Navistar has invested about $30 million into the Springfield facility in the past year. That has already paid off, Clarke said, with higher quality trucks and signs of growth.
“They have tough jobs,” he said of the assembly workers. “We don’t have very many easy jobs left to be very honest.”
Despite those improvements, the company still faces challenges. A handful of trucking companies have filed lawsuits against Navistar claiming defects in the company’s engines have harmed their businesses and led to constant repairs and dangerous road situations.
The company is reviewing those cases and takes them seriously, Clarke said, but he declined to provide further comment because it is pending litigation.
Clarke’s visit is a good sign for the community, said Mike McDorman, president and CEO of the Greater Springfield Chamber of Commerce. Local officials and residents want to see the company thrive, he said, despite Navistar’s challenges.
“It took some steps backward, but we’re hoping as a community it can grow again,” McDorman said.
Staying with the story
The Springfield News-Sun will continue to provide unmatched coverage of Navistar, one of Clark County’s largest employers. The paper has dug into the company, reporting on its problems with its engine technology and Navistar’s attempts to regain its share of the market. The paper spoke to Navistar’s CEO about what’s next for the Springfield facility and its roughly 1,100 employees.
By the numbers:
1,100 — Approximate number of total employees at Navistar today
980 — Approximate number of union workers at Navistar
300 — Approximate number of employees at Navistar in 2010
$30 million — Navistar’s recent investments in the Springfield facility