Navistar Plans to Close Engine-Part Foundry, Cut 180 Jobs
Navistar International Corp. announced plans to close the Indianapolis foundry where it produces engine blocks and heads for its MaxxForce engines.
The truck and engine maker said it expects that move to cut about 180 jobs while reducing costs by about $13 million per year.
The foundry closure will occur during the first half of 2015 and is expected to be complete in the summer, the company said.
Moving forward, Navistar will rely on suppliers for the components currently made at the foundry, the Lisle, Illinois-based company said.
“Over the last two years, we’ve taken a number of steps to strengthen our business and position the company for a return to profitability and long-term success,” Persio Lisboa, Navistar’s president of operations, said in the Dec. 15 announcement. “We’ve determined that leveraging our suppliers for these components will reduce our engine costs, improve our overall manufacturing capacity utilization and free up additional resources to invest in our core North America truck and parts business.”
Navistar said it took an $11 million charge in its fiscal fourth quarter that includes employee separation benefits, pensions and other post-retirement benefits and inventory reserves.
The company is scheduled to report financial results for its fiscal fourth quarter and year on Dec. 16.
The company also said it expects up to $40 million in additional charges during the first half of 2015 for accelerated depreciation related to the foundry’s closure.
“Closing a facility is a difficult decision because of its impact on the many great people who’ve been part of our company,” Lisboa added. “We will treat people with dignity and respect throughout this process.”
