Navistar reported a net loss of $154 million in its fourth-quarter results Friday, or $1.91 per share, but said the company overall is in a stronger position than it was one year ago.
Company executives said the organization’s finances are still being affected by its previous engine strategy, specifically in the form of warranty expense. The company has struggled to recover after its failed attempt to develop its own engine technology, which failed to meet federal emission standards.
Navistar employs as many as 800 production and maintenance workers at its Springfield truck manufacturing facility, and as many as 1,300 workers on its campus overall. Hiring at the local facility is expected to remain stable in 2014, said Bill Osborne, senior vice president of global manufacturing and quality for the company.
“Obviously, if there’s a tick up in demand in the industry and we need to increase our output, there would be an opportunity, but that’s really market driven.” Osborne said.
Other company officials said the figures released Friday were disappointing but pointed to some positive signs, including an order backlog that is 26 percent higher than at the same time last year.
“Clearly, we are disappointed that our previous engine strategy continues to negatively impact us in the form of additional warranty expense, but we will continue to stand behind our products and manage this issue as these engines work their way through the standard and extended warranty cycles,” said Troy Clarke, president and CEO of Navistar.
Still, Clarke said the company has worked to become more efficient and is in a better position to be competitive in the market than it was one year ago.
“We still have a lot of hard work ahead of us, but we are pleased to be entering 2014 in a much stronger position than we were one year ago,” Clarke said.
Vicki Bryan, an analyst with Gimme Credit, took a much more negative view of the company’s results.
In particular, she argued the cost for warranty repairs was troubling.
“This hardly restores confidence in legacy new and used models still for sale, especially after more than a year of management assurances that problems have been adequately identified and addressed, or in the likely quality and durability of Navistar’s new models with its proprietary engines, which were conceived, tested and produced in a matter of months,” Bryan said.
Overall, the company’s net loss for fiscal year 2013 was $898 million, or $11.17 per share, compared to a net loss of $3 billion or $43.56 per share for fiscal year 2012.
The Springfield News-Sun takes an in-depth look at the role the Springfield plant will play as Navistar tries to recover from financial problems, management changes and troubles with federal regulations.