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Updated: 3:03 p.m. Saturday, June 11, 2011 | Posted: 3:02 p.m. Saturday, June 11, 2011
By Tiffany Y. Latta
Staff Writer
SPRINGFIELD — Heavy commercial truck orders are up locally and nationwide, prompting manufacturers to increase their work force.
Navistar officials confirmed last week they are mulling plans to recall the remaining laid off Springfield plant workers and to hire temporary workers due to an increase in demand.
“We are evaluating, right now, the potential of an increase in Springfield that would drive more business,” said Jim Rumpf, a plant manager in Springfield.
Last year, Navistar laid-off about 250 workers in October, and the plant temporarily shut down.
United Auto Workers Local 402 President Jason Barlow estimated Navistar could recall and hire as many as 145 workers by Aug. 1.
Americas Commercial Transportation Research analysts based in Columbus, Ind., say Navistar is not alone as freight volumes have grown nationwide.
ACT President Kenny Vieth credited the turnaround on the economic recovery and on trucking companies updating aging fleets because few companies replaced trucks during the recession.
Orders for Class 8 trucks, the front-end of an 18-wheeler tractor-trailer rig, were up 85 percent industry-wide from a year ago in May. And in April, manufacturers reported a backlog of orders of more than 126,000 units, the biggest backlog the industry has experienced in five years, Vieth said.
“This recovery is industry-wide, and all the manufacturers and suppliers are recalling workers laid off during the economic downturn. We’re forecasting that this will continue and will remain strong for years,” Vieth said.
Navistar profits jumped 72 percent during the second-quarter from a year earlier, and officials now expect to come in at the high end of adjusted earnings at the end of the year, according to a report released by Navistar last week.
The trucking and engine maker reported a net income of $74 million or 93 cents per share at the end of April, up from $45 million or 63 cents per share a year ago, the report said.
“The second quarter results represent good earnings and strong cash flow from operations while building to deliver to our 2011 and beyond objectives,” said Daniel C. Ustian, Navistar chairman, president and chief executive officer in a statement last week. “We continue to see increasing customer acceptance of all our engine and vehicle families, confirming we have the right strategy in place and that we will deliver full year results toward the higher side of our previous guidance.”
Navistar’s truck segment profit rose to $92 million, up from $76 million in 2010, according to its second-quarter results.
The company now forecasts its end of year adjusted earnings to be between $427 million and $465 million, equal to $5.50 or $6 per share, Navistar officials reported.
“In the second quarter, our growth strategy continued to unfold as we introduced a number of products to the market place,” Ustian said. “Our core business has seen an increase in volume and our military and service parts continue to deliver strong results. We also delivered solid results while investing in our future and growing globally.”
Navistar’s earnings have been helped by its three new truck models: the Workstar, Transtar and Prostar, Rumpf said last week.
Hundreds of workers were recalled this year after 98 workers took buyout packages in December and 97 employees took retirement packages in January.
United Auto Workers Barlow said the remaining 53 laid off Springfield plant workers and between 30-35 workers from an Indianapolis plant that was closed a few years ago could be recalled by Aug. 1.
Barlow also said Navistar could hire temporary workers as part of an agreement with the union that allows for up to 10 percent in temporary workers based on the current workforce.
“We’re thrilled to be growing and have the opportunity for suppliers to grow in Springfield and create jobs,” Barlow said.
Barlow said Navistar has delayed production increases the last three months, but he expects the company to go forward with the recall and hires in August.
“Things can change as always, but we feel there will be an increase in August unless something drastic happens in the market,” Barlow said. “All of our plants have increased production, the plant in Mexico and the plant Garland, Texas.”
He said Navistar recently recalled 66 mechanics at its local truck specialty center and are expected to hire additional mechanics and four clerical staffers this summer.
Mike McDorman, president of the Greater Springfield Chamber of Commerce, said he’s pleased with Navistar’s turnaround and hopes the company continues to create jobs in the area.
“This is very positive news for the company that we hope translates into more opportunities for Springfield,” McDorman said.
“The Springfield facility has good management and union leadership working together toward a common vision and in remaking Springfield the trucking capital of the world.”
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