Navistar to Lay Off 170 Workers in Melrose Park
Famous truck parts manufacturer, Navistar International Corp (NYSE:NAV), has announced that the company is ending the production of a truck engine at its Melrose Park manufacturing facility in Illinois, after which 170 employees will be laid off.
The Illinois-based Navistar has confirmed that it will no longer be manufacturing its medium-duty 9/10-liter engine that powers box trucks and military vehicles.
As a result, employees working on its production—primarily factory workers—will face layoffs. The affected employees include 140 manufacturing line workers, while the remaining 30 are management and support staff.
According to the company spokesperson, Lyndi McMillan, the company has found the truck engine to be no longer financially viable to produce. The move to end its production and lay off employees is expected to save the company about $12.0 million in annual operating costs.
McMillan said, “Over the last couple years, this engine has really become a niche engine.” She further added, “Looking at the financial impact it would take to keep this engine compliant with (Environmental Protection Agency) standards, it just wasn’t in the cards.”
Following these layoffs, Navistar’s Melrose Park facility will be left with about 400 employees. The company will continue its engine testing and validation operations at the facility, as well as utilizing the space to sell and recondition used trucks.
Navistar has been undergoing a restructuring overhaul under its CEO Troy Clarke, who has been making an effort to keep the manufacturer afloat in a rapidly changing industry.
Navistar faced losses and racked up a debt pile in recent years as demand for heavy trucks declined. In addition, the company also got caught up in the emissions scandal that hit a number of big automakers—most notably, Volkswagen.
CEO Clarke’s restructuring efforts have led to a number of strategic changes at the company, including plant closures, sale of business units and thousands of layoffs. So far, the CEO has overseen over 4,000 layoffs. The latest round took place just two months ago when the company laid off over 80 employees at its Truck Specialty Center in Springfield, Ohio.
As of late, Navistar employs a workforce of over 14,000 employees.
“Navistar to lay off 170 in Melrose Park, cut production of box truck engine,” Chicago Tribune, August 4, 2017.