You have reached your limit of free articles this month.

Enjoy unlimited access to SpringfieldNewsSun.com

Starting at just 99¢ for 8 weeks.

GREAT REASONS TO SUBSCRIBE TODAY!

  • IN-DEPTH REPORTING
  • INTERACTIVE STORYTELLING
  • NEW TOPICS & COVERAGE
  • ePAPER
X

You have read of premium articles.

Get unlimited access to all of our breaking news, in-depth coverage and interactive features. Starting at just 99c for 8 weeks.

X

Welcome to SpringfieldNewsSun.com

Your source for Clark and Champaign counties’ hometown news. All readers have free access to a limited number of stories every month.

If you are a News-Sun subscriber, please take a moment to login for unlimited access.

Springfield plant key to Navistar’s future

Company cutting 500 jobs overall after disappointing earnings report.More than 900 people work at truck maker’s local plant.


Navistar’s Springfield plant is a key to turning around the truck maker’s fortunes, company officials said Thursday, one day after Navistar announced a plan to cut 500 jobs.

The company-wide reductions will have little, if any, effect on the more than 900 people who work in Springfield, according to company and local union officials.

“They’re our focal point in improving our business and will be minimally impacted by these reductions,” Navistar spokesman Steve Schrier said of the Springfield plant.

On Wednesday, Navistar International Corp. reported losses for the fourth straight quarter and said 500 jobs will be slashed by the end of October. Those reductions will largely focus on salaried and contract employees, said Schrier.

The Springfield facility produces medium duty, heavy duty and severe service trucks. Schrier said the Springfield plant, along with a facility in Escobedo, Mexico, have the flexibility to produce several varieties of the company’s products.

One year ago, Navistar had three truck manufacturing plants, including the facilities in Mexico and Garland, Texas. The Texas facility has since closed and workers in Springfield and Escobedo picked up the work that was previously done there. The company’s confidence in Springfield made that consolidation possible, Schrier said.

Local union officials agreed that the cuts should have a minimal impact on the Springfield facility.

“That’s primarily all management and exempt positions corporate-wide,” said Jason Barlow, president of the United Auto Workers Local 402. The union represents many of Springfield’s Navistar workers.

The Springfield plant once employed more than 7,000 people in the 1970s to a low of about 300 just three years ago. Since then, more positions and work have been added, but the overall company has struggled financially.

Analysts this week had expected revenue for the company of about $2.92 billion, but Navistar’s revenue actually fell 12 percent to $2.82 billion in the three months that ended on July 31.

Analysts who monitor the company said Navistar will have a tough road as it struggles to improve its fortunes. Much of the problems the company has had in recent years stem from an attempt to develop an engine technology that failed to meet 2010 carbon emission standards. Since then the company eventually decided to forgo its own technology and rely on an engine technology used by competitors.

“Navistar is under the gun to get its wheels out of the ditch after finally abandoning its colossally failed proprietary emissions system produced in all its legacy engines and trucks,” Vicki Bryan, a senior high yield analyst said in a report for research firm Gimme Credit after Navistar’s latest results. “As it struggles to reinvent its entire product line in a matter of months, its biggest challenge will be to maintain sufficient cash to fund the transition that will secure its future.”

While the cuts are always a difficult decision, Schrier said it is a necessary step that must take place as the company tries to turn its financial situation around.

“At the end of the day I think we’re really making some tough decisions that will bring us back to profitability,” Schrier said.


Reader Comments ...


Next Up in Business

Gmail phishing scam may lead users to give up login info
Gmail phishing scam may lead users to give up login info

A new phishing scam is allowing hackers to gain access to unsuspecting Gmail users' accounts and target their login credentials, according to recent reports. Mark Maunder, CEO of security service Wordfence, described the scam in detail in a blog post, adding that it is also targeting other services beyond Gmail. Tech Times reported that the scam involves...
Millennials spend more on coffee, save less for retirement
Millennials spend more on coffee, save less for retirement

A large number of Millennials spent more on coffee in the past year than they invested in their retirement savings, according to a new study. » RELATED: What makes Millennials tick in the workplace? It may surprise you About 41 percent of the Millennials — ages 18 to 35 — admitted to spending more on coffee than they saved for retirement...
Some worry over impact from health care law repeal
Some worry over impact from health care law repeal

The U.S. House of Representatives on Friday joined the U.S. Senate in passing a budget reconciliation measure that would allow Congress to de-fund key elements of the Affordable Care Act, including tax credit subsidies and federal funding for Medicaid expansion in states like Ohio. While some are rejoicing over the move, replacing President Obama&rsquo...
Will Obamacare repeal leave people in the lurch?
Will Obamacare repeal leave people in the lurch?

As Congress moves forward on a resolution to repeal the Affordable Care Act, experts have warned such a measure could crash the law’s commercial insurance program, jeopardizing coverage for 11.5 million Americans, including more than 230,000 Ohioans. But local industry leaders remain hopeful that congressional Republicans — who are leading...
Holiday retail sales up, but some stores suffering
Holiday retail sales up, but some stores suffering

Retail sales hit about $658 billion for the holiday season, but several chain retailers still announced the closures of hundreds of unprofitable brick-and-mortar stores in January — including several stores locally. “These numbers show that the nation’s slow-but-steady economic recovery is picking up speed and that consumers feel...
More Stories