EPA approves Navistar engine

Springfield plant tests production of new vehicle.


Business reporter Everdeen Mason has investigated Navistar’s recent crises for the past year - including plummeting revenues, rejected engine technology, potential jobs cuts and more - and how it affects more than 850 workers at the Springfield plant.

Navistar’s new leader will visit Springfield today, the same week the company’s big-bore engines finally won federal approval and the local plant tested production of a military vehicle.

Navistar — which has more than 850 workers at the Springfield manufacturing plant — slumped after its engine technology for heavy duty trucks couldn’t meet 2010 carbon emissions standards set by the U.S. Environmental Protection Agency. Last year, the company abandoned the technology it developed to start anew.

With current market conditions and the uncertainty of Navistar’s engine technology, many would-be customers were holding back in purchasing its trucks, said Jason Barlow, president of United Auto Workers Local 402, the union that represents many local Navistar employees.

Now Barlow anticipates many of those buyers will consider purchasing heavy duty Navistar trucks again.

Springfield had primarily manufactured medium duty trucks, but now that the plant in Garland, Texas, has closed, Springfield and the Escobedo, Mexico, plant are charged with building all types of Navistar trucks.

“We’ll see more heavy content coming into the plant, but (corporate leaders) haven’t said anything about production numbers increasing yet,” Barlow said.

The local plant hired new workers last year for the first time in a decade after plummeting to an all-time low of about 250 employees in 2010.

The Springfield plant also built its first MaxxPro military vehicle on Wednesday, Barlow said. The vehicle is bomb resistant and carries troops in Afghanistan and Iraq.

Navistar spokesman Steve Schrier said the military chassis had been built in Garland.

“We closed Garland so we just did a test launch to demonstrate that we could build the chassis in Springfield,” he said. “Now we have the ability to build that in Springfield.”

The company’s new CEO Troy Clarke will visit Springfield today for the first time. Clarke, originally from General Motors, took over in March.

Schrier said he couldn’t disclose specifics about the visit and declined a request to allow the Springfield New-Sun to attend.

The company made some major changes in management in the past year. The company ousted Dan Ustian after more than a year of financial and engine-related troubles in August.

The company’s stocks plummeted last year after months of declining revenue — a loss of $2.9 billion for the fiscal year ending Oct. 31, 2012, and a first-quarter 2013 loss of $127 million.

Last year, Navistar:

• Laid off or bought out more than 700 workers in its corporate offices and closed the Garland manufacturing plant.

• Announced a Securities and Exchange Commission investigation of Navistar’s finances because of concerns about disclosure and accounting.

• Suffered a decline in company shares of more than 50 percent.

• Was forced to create a “poison pill” measure to prevent shareholders from acquiring more than 15 percent of shares after activist investors began buying large amounts of stock — prompting fear that a forced takeover was in the works.

Schrier said with the launch of the new 15-liter engines, Navistar has a wider portfolio to sell.

The company will phase out the Exhaust Gas Recirculation technology used in its old engines and start producing more engines that combine Navistar’s engines with Cummins Selective Catalytic Reaction after-treatment.

Schrier said the company will continue to sell Cummins engines in the ProStar truck as well.

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