Navistar has two engine plants in Huntsville Ala and another in Melrose Park Ill One of the Alabama plants was designed to build a type of Class 8 truck engine that Navistar no longer produces instead sourcing the units from Cummins Inc

Navistar Considering Engine Plant Consolidation

March 24, 2013
CEO targeting “underutilized capacity” No final plans

Truck and diesel engine builder Navistar International is considering how to reduce its operating costs, and consolidating its engine production capacity may be one option. According to various reports, the company’s chief operating officer and future CEO Troy Clarke indicated such a strategy recently in comments at the Mid-America Trucking Show, in Louisville, Ky. 

"We build engines in three places and none of them is fully utilized,” Clarke reportedly explained. “You just can't make any money doing that. Underutilized manufacturing capacity is just a cost, and it is a cost that we don't have to bear."

No specific plans have been concluded, and no final plans would be expected for several months to come.

Navistar has been looking for cost-cutting opportunities over the past year, in order to stabilize its financial status as it works to make its diesel engine products compliant with U.S. Environmental Protection Agency standards for NOx emissions. The company reported losses of about $3 billion for 2012.

Navistar initially committed to an exhaust-gas recirculation (ECR) technology to capture NOx, but EPA ruled that process unacceptable, which forced Navistar to pay penalties on its existing engines, and to invest in development of an alternative. Changes in production programs also have been necessary.

The company adopted an alternative, selective catalytic recirculation (SCR) technology, and recently Navistar officials indicated that the company expects EPA this month to validate its 13-liter, MaxxForce Big Bore engine.

Capacity consolidation would be a familiar strategy for Navistar. Last fall it initiated plans to close one of its Class 8 truck plants, in Garland, Tex. Two other plants in Springield, Ohio, and Escobedo, Mexico, were in line to absorb the production volume from the Texas plant.

Similarly, Navistar has two diesel engine plants in Huntsville, Ala., and Melrose Park, Ill. Also, however, the company has started sourcing heavy-duty diesel engines from Cummins Inc., as part of its effort to comply with current EPA standards for NOx emissions.

About the Author

Robert Brooks | Content Director

Robert Brooks has been a business-to-business reporter, writer, editor, and columnist for more than 20 years, specializing in the primary metal and basic manufacturing industries. His work has covered a wide range of topics, including process technology, resource development, material selection, product design, workforce development, and industrial market strategies, among others. Currently, he specializes in subjects related to metal component and product design, development, and manufacturing — including castings, forgings, machined parts, and fabrications.

Brooks is a graduate of Kenyon College (B.A. English, Political Science) and Emory University (M.A. English.)

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