Navistar International Corp.’s stock rose 24 percent after the company announced Thursday a new CEO, its quarterly earnings and plans to up production.
Company President and Chief Operating Officer Troy Clarke will become Navistar’s president and CEO April 15.
Navistar — the ninth largest employer in Clark County with more than 850 workers — plans production increases in Springfield and hired 20 temporary workers last month, said Jason Barlow, president of UAW Local 402.
Clarke joined Navistar in 2010 after a 35-year career at GM.
Interim Executive Chairman and CEO Lewis Campbell will step down from those positions and the board.
Although stocks topped $31.14, the company reported first-quarter losses of $127 million, up from a $157 million loss a year ago. In November the company reported a loss of $2.9 billion for the fiscal year ending Oct. 31, 2012.
Navistar has made cuts to staunch the losses. It’s closing its Garland, Texas, plant this summer, and moving production to Springfield and its plant in Escobedo, Mexico. Navistar also cut 700 corporate-level jobs between buyouts and layoffs, and may cut more, according to a news release. Spokesman Steve Schrier said the company is reviewing sales, administration and other areas to look for cost-saving cuts.
“They got beat up pretty badly with all the things that were going on but the basic value of the company is there. They made a bad bet on the emission control,” said David Cole, chair emeritus of the Center for Automotive Research.
He cited Navistar’s struggles last year with bringing its engines up to carbon emissions standards, something it couldn’t do despite millions invested. A lawsuit from competitors followed, as well as a battle with the Environmental Protection Agency and pressure from activist investors to shake up the company.
“Now they have stability with a new leader stepping in and you have that reduction of uncertainty,” Cole said.
The truck market has struggled. The economy is on “neutral,” Cole said, and many companies are sitting on cash, and cutting back investments and hiring.
Navistar’s trucking segment is down from a year ago. It reported a $58 million loss in the trucking segment this year, compared with the first quarter loss of 2012 of $27 million.
According to Navistar, the loss was driven by a decline in traditional truck volumes and from the Garland closure.
In the long run, closing Garland “will help us reduce costs because we have enough capacity building trucks efficiently at Springfield and Escobedo,” Schrier said.
Barlow called Clarke’s promotion a good thing.
“He has a long history of working with (the UAW) … In the past (Navistar was) running away from union labor, now they’re saying they want to work together instead of fighting or discouraging union involvement,” Barlow said.