Navistar loses $247 million in Q3, cuts 500 employees from workforce
| September 04, 2013 |
The cuts were announced as part of Navistar’s earnings report Tuesday morning, where the company reported a third quarter 2013 net loss of $247 million—down significantly from a net income of $84 million posted the same quarter last year. Navistar says the loss was driven primarily by lower truck sales in North America due to its transition away from EGR engines to SCR engines and due to “weaker industry conditions.”
“These actions are always difficult, but we are committed to making tough choices to return Navistar to profitability,” Troy Clarke, Navistar’s president and chief executive officer, says. “…we clearly need to accelerate progress with our financial results, and we are already implementing additional cost reduction and business improvement actions to counter our near-term volume challenges. This includes resizing our company to match our current business environment.”
Clarke added the workforce reduction was part of the company’s plan to transform itself into a “leaner, simpler to run business focused on functional excellence.”
Steve Schrier, Navistar’s Senior Manager for External Communications, says the job cuts are spread globally across the company and are not related to Tuesday’s announcement that the company plans to offer the Cummins ISB engine in select medium-duty trucks and busses.
“We sent letters out in August,” he says, “and what makes up that number is about 140 to 150 contractors and other employees globally and across all functions. (The workforce reduction) is not tied to engine manufacturing.”
The company expects to complete nearly all job reductions by November, and projects these and related activities to generate an additional $50 to $60 million in annual savings beginning in its fiscal year 2014.