Friday was the last day for some workers at Navistar’s Springfield location as the company expects to lay off more than 100 workers in the coming weeks.
Chris Blizard, the president of UAW Local 402, said he was told by Navistar this week that layoffs at the Springfield plant could affect as many as 136 assembly production workers over the course of the month.
“I don’t believe it will increase based on the information that I have right now. But it’s subject to change,” he said.
Lyndi McMillan, a spokeswoman for Navistar, said in an email sent to the News-Sun on Friday that final plans regarding changes at the Springfield plant have not been finalized by the company.
“We have not finalized numbers,” she said.
Last month, Navistar announced that it would be reducing production line rates at its Springfield assembly plant. McMillan said at the time that “this cycle is normal for our business, and this is not a shift of production to other locations.”
Company officials did not release which lines would be affected by the reduction. However, Blizard said the plant’s main line, which deals with medium-duty commercial trucks, will reduce the number of units it produces in a day.
Blizard said the company already reduced production on that line in August and will likely implement further changes on Monday. But, line production rates for the plant’s line two, which makes vans for General Motors, is expected to increase on Sept. 16.
It is a move Bizard said will help offset the number of employees that will be affected by the layoffs.
Navistar is a significant employer in Clark County and employs approximately 2,000 workers at its Springfield plant, which specializes in producing medium-duty commercial trucks.
Blizard said information he received from the company regarding layoffs only relates to workers represented by his chapter of the United Automobile Workers.
He said layoffs will be administered based on seniority and affected workers will retain recall rights at the plant.
Virginia Martycz, director of Clark County’s Department of Jobs and Family Services, said she was notified about the layoffs and her organization is working with the state to deploy a rapid response team to provide information about unemployment compensation and other resources to impacted workers.
Blizard said for 20 employees, Friday would be their last day with the company. He said layoffs will occur at the end of each week during the rest of September.
The news comes as Navistar saw a strong third quarter, in which the results of that period were released earlier this week. The company reported $3 billion in revenues due mainly to an increase in its volume of commercial trucks. Company officials project that retail deliveries of trucks and buses in the United States and Canada will be between 435,000 to 455,000 units by the end of the year.
They are also forecasting retail deliveries of 335,000 to 365,000 units in 2020, with heavy-duty trucks making up the majority of projected deliveries.
However, Steve Tam, vice president at Americas Commercial Transportation Research, said production of medium and heavy-duty commercial trucks have surpassed sales nationally. There has also been a decline in the backlog of orders waiting to be built.
“Navistar’s backlogs are declining as well. And as you have seen, we are actively managing this by adjusting assembly line rates to create a balance between customer demand, inventory levels and a healthy backlog,” said Troy Clarke, Navistar’s president and CEO, in a conference call with investors Wednesday morning.
Clarke said industry orders for heavy duty-trucks have declined by 75 percent in the third quarter this year.
Tam said more than twice as many heavy-duty commercial trucks have been built over the last six months than orders for those trucks. He said numbers regarding the medium-duty truck market are less dramatic.
Since the beginning of the year, orders of medium-duty commercial trucks have been on average 15,000 units per month compared to the 19,000 trucks that are being produced on a monthly basis, according to data collected by Americas Commercial Transportation Research.
Tam said backlog orders for medium-duty trucks are declining at a much slower rate than their heavy-duty counterparts. However, he said it has caused some companies to adjust their production rates.
“When there is too much supply, as we are seeing, demand wanes. In the heavy-duty market, we have too many trucks chasing too little freight,” Tam said.
Clarke said in a conference call to investors that assembly line rates have been reduced at the company’s two truck plants.