Navistar may close plants to cut costs: CEO
By Scott Malone
LISLE, Illinois (Reuters) - Embattled U.S. truck and engine maker Navistar International Corp (NAV.N: Quote) is cutting administrative and engineering spending and may close factories as it works to lower its costs, the company's newly named chief executive said on Thursday.
The company is cutting its white-collar work force by about 800 people through a combination of voluntary buyouts and layoffs, reducing its engineering spending by 28 percent and will review whether it needs all 19 of its North American factories, CEO Lewis Campbell said in his first interview since taking the reins at Navistar on August 27.
"We are now looking at what are the range of industry volumes that could come to us over time and what is the right footprint? More than likely we'll have to adjust our footprint. And we're ready to do that," said Campbell.
The Lisle, Illinois-based company is also reviewing whether to close or sell any of its businesses outside of its core North American truck and engine operations, said Campbell, 66.
The company employed 19,000 people at the end of its last fiscal year, which ended October 31, 2011.
Navistar, which makes International-brand heavy trucks, Monaco Coach motor homes and school buses, has struggled for the past year as it was hit by heavy warranty expenses.
In July, it gave up a lengthy effort to win U.S. regulatory approval for a diesel engine model and instead is adopting the engine technology used by rivals such as Paccar Inc (PCAR.O: Quote) and Volvo AB (VOLVb.ST: Quote).
The company has lost $241 million through the first nine months of this fiscal year and analysts do not expect it to return to profitability until the third quarter of fiscal 2013, according to Thomson Reuters I/B/E/S. Continued...