Navistar’s Springfield plant is focusing on making its manufacturing processes more efficient and identifying problems earlier to improve the quality of its vehicles.
The company has invested millions in new equipment in Springfield over the past several years to revamp the interior of the facility and streamline its manufacturing processes, said Mark Hernandez, the company’s vice president of global manufacturing. Hernandez has been with Navistar since April after a stint with McKinsey and Company where he was also tasked with leading lean manufacturing efforts for that firm.
The truck maker’s competitors got a head start on streamlining their manufacturing process as Navistar struggled with an engine technology for heavy-duty trucks that failed to meet emissions standards set by the Environmental Protection Agency. But he said Navistar has made major strides in the past few years, and one of the reasons he took the job is the company is on the right track to make even bigger improvements.
“The gap is narrowing,” Hernandez said. “We can close it quickly.”
This year is significant year for workers in Springfield. The company recently started negotiations with the UAW Local 402, which represents the majority of workers at the facility. Navistar is also expected to launch a new medium-duty Silverado truck later this year that is being built by workers in Springfield. The firm is continuing to hire workers for that project.
The new Class 4, 5 and 6 chassis cab trucks, which will be aimed at fleet and commercial customers, are expected to launch later this year as part of a partnership with GM.
MORE BUSINESS NEWS: GM unveils new Silverado to be built in Springfield
Hernandez said the company’s culture has been changing over the past several years to embrace lean practices, which is a strategy to eliminate waste and efficiencies from the manufacturing process. He said the company’s workers have embraced the changes.
One change the company has made is utilizing a system in which workers can easily notify management, maintenance and other workers of problems as they occur on the assembly line. It has allowed workers to address the issues more quickly and prevented problems from escalating or temporarily shutting down production. The company’s philosophy is management and other support staff’s primary mission is to support the workers on the line, Hernandez said.
The company is also increasingly able to use data collected on the assembly line to identify other potential ways to make the manufacturing process more efficient, he said.
“We’re a long way from where we were five years ago,” said Jeff Webb, the company’s Springfield plant manager, said of the investments. “Over time I think we’ve built a level of trust.”
Hernandez also said despite the Springfield plant’s accomplishments, there’s always room for improvement.
“Our challenge is we still have too many parts on the line,” Hernandez said.
Chris Blizard, president of the UAW Local 402, could not be reached for comment Friday. The union represents the majority of Navistar’s workforce.
The company has made a significant turnaround over the past several years. Navistar had as few as 300 workers in Springfield as recently as 2010, but has rebounded financially and now has approximately 1,800 workers in the facility. Thousands of the company’s retirees also live in the area. The company announced a strong third quarter earlier this month reporting net income of $170 million compared to about $37 million at the same time last year.
Troy Clarke, Navistar’s president and CEO, recently told investors he expects strong financial results to continue into next year as the industry is seeing near-record demand for heavy trucks. Workers at Navistar’s Springfield facility produce medium, severe service and heavy duty commercial trucks, as well as the GM cutaway van on a separate line.
“Things are going well,” Hernandez said of ongoing negotiations. “We want to create a win-win atmosphere.”
Michael McDorman, president and CEO of the Chamber of Greater Springfield, said the company’s recovery has been important to the region.
“It’s great to see the company resurging and offering new products at the Springfield facility,” McDorman said. “We want to see them continue to grow and hopefully diversify their products.”
The News-Sun reported earlier this year the industry is seeing near-record demand for heavy trucks, boosting revenue both for manufacturers like Navistar and their suppliers. Hernandez said Navistar has the capacity to ramp up production, but parts suppliers nationally are still working to catch up, an issue that’s impacting the industry as a whole.
“We can build more trucks,” Hernandez said. “The supply chain has yet to keep up with us.”
The Springfield News-Sun will continue to provide unmatched coverage of jobs and the economy in Clark and Champaign Counties. For this story, the News-Sun toured Navistar’s Springfield facility and discussed investments the company has made to make the manufacturing process more efficient.
By the numbers:
$170M — Navistar’s Q3 net income this year
$37M — Navistar’s Q3 net income last year
1,800 — Estimated total workers at Navistar’s Springfield plant
$10.1 to $10.4 billion — Projected revenue for 2018