At the same time, union leaders say the Springfield plant is poised to get more work shifted from a Mexican plant and that a layoff notice sent to the state is better described as a restructuring of the workforce.
READ MORE: $12M Navistar project could retain 114, add 40 new jobs in Urbana
“We are still the only heavy truck plant in the United States without people on layoff,” said Jason Barlow, UAW Local 402 president.
Navistar officials attributed the loss to fewer truck sales in the U.S. and Canada and a $60 million charge related to its used truck inventories.
But Navistar leaders and some analysts said they expect better results later this year, driven in part by improving conditions across the industry.
“We are on track to improve last year’s results but still have quite a bit of work to do in the second half,” said Troy Clarke, Navistar’s chairman, president and CEO. “However the work we’ve done in the first six months growing share, building our backlog and managing costs, combined with improving industry conditions, positions us to deliver a stronger second half.”
At the same time last year, Navistar had reported a $4 million profit, the first time the company had turned a profit in several years. The truckmaker's shares were down 1.9 percent late Wednesday afternoon to $29.36 a share.
DETAILS: Major Springfield employer Navistar reports net loss of $97M this year
Navistar sent a notice to the state earlier this week that it plans to lay off more than 80 workers at its Ohio Truck Specialty Center in Springfield beginning in early August.
However both company and union leaders said Wednesday it's more accurate to describe the layoffs as a move to restructure the local workforce, and those workers will be able to apply for jobs at the company's main assembly plant in Springfield. Navistar has pledged to create as many as 600 new jobs at its main assembly plant as a result of two joint agreements with GM.
Navistar’s Springfield plant began production this year on a cutaway model of GM’s G Van, which the company highlighted in a conference call with investors Wednesday. Next year, Navistar is also expected to begin production of medium-duty trucks early next year as part of a separate joint agreement with GM.
Despite Wednesday’s results, there are reasons for optimism, said Vicki Bryan, a senior high yield analyst with Gimme Credit, an independent research service on corporate bonds.
“Navistar’s results seemed mostly disappointing, as a bigger loss on further adjustments to used truck reserves offset the beat in revenue,” Bryan said. “The best news was strong order growth and affirmed ‘17 guidance, which signal a significant rebound in the second half.”
MORE BUSINESS NEWS: 4 new stores move into Upper Valley Mall
Workers at Navistar’s Springfield facility are also expecting additional work on the horizon to build the company’s Prostar Day Cab trucks, which are now only being produced in Escobedo, Mexico, said Jason Barlow, president of the UAW Local 402, which represents the majority of workers at the Springfield site. A separate, Prostar Sleeper Cab will continue to be produced only in Mexico, he said.
Once that project moves forward, the truck would be produced both in the Springfield and in Mexico to provide options for customers who have specifically asked for American-made vehicles, he said. It’s not clear what impact that might have for additional employment in Springfield yet, he said, but more work would provide more security for existing workers.
Although the notice Navistar filed with the state said 81 workers would be permanently laid off, Barlow said it’s actually a restructuring of the company’s workforce, and most of the affected workers will be able to move to different jobs. He also said it’s unlikely all 81 workers will be affected, but the company wanted to be conservative when filing the notice with the state.
The work being done at the Ohio Truck Specialty Center was initially planned for the nearby assembly plant, but that site wasn’t capable of handling the additional capacity, he said. Navistar has since invested in the assembly plant and is operating additional production lines, so moving the work back to the assembly plant would be safer and more efficient, he said.
“It was only there temporarily, which ended up being over five years,” Barlow said. “Now the layout is a lot better at our facility so that work will come over to the main assembly plant.”
The affected workers will receive preference when applying for jobs at the assembly plant, Barlow said. They will also retain recall rights if they want to move back to the TSC when work picks up there.
Despite the layoff notice, Navistar is actually ramping up hiring in Springfield into next year, he said.
By the numbers:
$80 million — Net loss reported by Navistar
1,500 — Estimated workers in Springfield
$2.1 billion — Estimated revenue for the quarter
About the Author