Navistar to end engine production in Melrose Park, cut 170 – Manufacturing News

on Aug3

3 August 2017 | 8:17 pm

Navistar is ending engine production in Melrose Park by the second quarter of fiscal 2018 and will lay off 170 employees as a result, a company spokeswoman said.

The decision affects 140 manufacturing workers belonging to United Auto Workers and about 30 managerial employees. Many of the employees are eligible for retirement, said Lyndi McMillan, a spokeswoman for the Lisle-based manufacturer. After the layoff, 400 employees will remain at the facility in two separate units: truck and engine testing and used truck sales and reconditioning.

The 9/10 liter engine is used in medium-duty trucks in the United States and some defense vehicles, and some are exported to Mexico, McMillan said. But sales of the product are low, and the expense of certifying it with the U.S. Environmental Protection Agency outweighed its value.

“Over the years this 9/10 has become a niche engine offering,” she said. “The production numbers are very small.”

The cuts will reduce Navistar’s operating costs by $12 million each year, but first it will result in a $43 million charge, including $8 million in cash. About $32 million will go toward employee separation, pension and post-retirement contractual termination benefits and $11 million toward inventory reserves.

The company hopes to retain some of the salaried employees but redeploy them elsewhere, McMillan said.

Read more:

Why Navistar could become a VW subsidiary
Navistar’s turnaround bid hangs on a massive crane-carrying truck
Ex-Navistar CEO fights suit that says he lied to investors

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