Local officials ’ too early to tell economic impact’ of Navistar layoffs

Local officials say it’s too early to tell what long term effect layoffs at Navistar’s Springfield plant will have on the region’s economy.

More than 100 workers lost their jobs indefinitely at the Springfield plant this month. Though official numbers have not been released by Navistar, a local union president said 126 assembly production workers were affected.

Earlier this week it was announced that as many as 1,400 additional employees would be temporarily out of work on Monday due to a shortage of parts at the plant. A strike at General Motors has affected several facilities that provide parts for GM vehicles built at Navistar’s Springfield plant.

As a result, officials with Navistar announced that it would temporarily shut down two assembly lines in Springfield.

Chris Blizard, president of UAW Local 402, said his union represents a large portion of workers at the Springfield plant. Those affected will be able to apply for unemployment benefits. He said those workers will be called back to the plant as soon as the line becomes operational again.

However, that depends on the length of the strike at GM.

The news comes at a time when layoffs at the plant, which started earlier this month, wrapped up on Friday, when 52 people worked their last day with the company.

Blizard said those layoffs are a result of Navistar reducing the number of units built on its main line at the Springfield facility, which makes medium-duty trucks.

Union officials with Local 402 were originally told by Navistar that 136 of their members would be affected. However, on Wednesday that number was changed to 126.

Lyndi McMillan, a spokeswoman for Navistar, said in an email sent to the News-Sun earlier this month that they have not finalized numbers at the plant.

Local officials who talked to the News-Sun hoped that the layoffs would soon pass and not become a growing trend for the company.

“We have hit a bump here. From what I have heard, I don’t believe this is a permanent thing and that is good,” said Clark County Commissioner Rick Lohnes last week.

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The last 15 years for Navistar have been turbulent, including in Springfield where there has been a series of layoffs and hiring sprees. The number of workers at the Springfield plant dipped to 300 as recently as 2010. However, that number has since surpassed 2,000.

“You never want anyone to get laid off. It’s not good for the local economy. But, there are other companies that are hiring as we speak,” said Lohnes.

Horton Hobbs, the vice president of economic development for the Chamber of Greater Springfield, said though the local economy is stabilizing and the pace of growth has slowed down, companies are still making investments.

Topre America, an auto parts maker, announced that it will be expanding its Springfield facility and is slated to bring 71 jobs to the area. A New Carlisle metal fabricating company, Fab Metals, is expected to finish an $8 million expansion at its facility next month and plans on adding between 14 and 19 jobs.

Hobbs said those expansions paired with jobs that are currently available gives workers affected by the Navistar layoffs more options.

A workforce development discussion held in Springfield last month found that area manufacturers are having trouble filling skilled labor positions. Some are even having trouble retaining entry level employees.

“There are ample opportunities for those seeking employment, particularly in manufacturing,” Hobbs said.

Adjusting to industry trends

The employees, represented by UAW Local 402, who were laid off this month have been with the company for less than a year, said Blizard.

The layoffs started shortly after officials with Navistar reported a strong third quarter, bringing in a net income of $156 million. The growth was largely attributed to the company's truck production. Officials said there has been a steady increase in the company's truck volumes year over year.

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However, Steve Tam, vice president for Americas Commercial Transportation Research, said the number of medium and heavy-duty trucks that are being produced has surpassed sales nationally. He said there has also been a decline in the number of backlog orders. Some companies have adjusted their production rates as a result, he said.

Navistar President and CEO Troy Clarke said earlier this month on a call with investors that assembly line rates have been reduced at the company’s two truck plants, the other being in Escobedo, Mexico. During the call, Navistar officials said those lines were cut by 15 percent.

“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,” Clarke said.

Blizard said affected workers will retain recall rights. However, it is unclear if Navistar will reverse its decision in the near future to decrease medium-duty truck production at the plant.

Around the same time Navistar announced it would be reducing production on its medium-duty truck line in Springfield, it also announced plans to increase production for the plant’s line two, which makes cutaway vans for General Motors.

Blizard said that decision helped offset the number of layoffs. Production on the line went up on Monday. He added that it still takes more people to operate the plant’s main line than it does for its line two.

However, that line will be idle next week due the GM strike.

United Auto Workers authorized a strike against GM that started on Monday amid contract negations between the union and the vehicle manufacturer. The parties failed to reach an agreement on a new four-year contract and approximately 50,000 workers across the country are taking part in the strike, according to the Associated Press.

Talks resumed this week between the union and representatives with GM.

Blizard said his union was notified by Navistar on Wednesday that both GM lines at the Springfield plant would be down next week.

Clarke said, during a call to investors Thursday morning, his company would idle production of commercial trucks for GM. He also told investors that the company would run out of engines and cabs for GM trucks on Friday, Sept. 20.

Blizard said about 100 union members will still be able to work at the Springfield plant next week even though the two production lines will be down.

“We’ve had down weeks before. People who qualify will get supplemental pay,” he said.

Local response to layoffs

Virginia Martycz, director of Clark County’s Department of Jobs and Family Services, said her organization is working with the state to provide information and other resources to those impacted by the Navistar layoffs, that is unrelated to the recent GM parts shortage at the plant.

Martycz said resources provided by her agency include helping people find jobs, develop their resumes or tap into funding that provides further training to workers. She said though some larger companies are looking for employees as they expand, smaller manufacturers also have job openings that need to be filled.

For employers looking for a particular set of skills, Martycz said her agency has funding set aside that can be tapped into for training. However, she said it depends on the individual needs of those looking for employment, as some may want to go into another industry.

Blizard said his union is working with jobs and family services to help connect workers to local resources. He said a meeting will be held on Monday at the union hall at 3671 Urbana Road at 9 a.m. 

The Springfield News-Sun has provided award-winning coverage of Navistar and the company’s impact on the region’s workforce. Recent Navistar coverage includes reviewing the company’s latest financial reports, talking to union officials and local economic experts.

By the numbers:

126: Number of assembly production workers that will be potentially laid off from the Springfield plant this month

2,000: Approximate number of employees that work for Navistar in Springfield

156 million: Navistar’s net income during the third quarter of this year

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