Navistar International to Cut 3,000 Jobs at Ohio Truck Plant

Navistar International Corp. said Wednesday that it will cut 3,000 jobs at its Springfield, Ohio, truck plant, or 60% of the plant’s work force, as the company struggles to become more efficient in the midst of a weak market.

Navistar said it will take a charge for the job cuts, but it said the size and timing of the charge will depend on negotiations with the United Auto Workers union, which represents 4,300 of the plant’s 5,000 workers.

The proposed cuts represent almost 19% of the truck and bus maker’s worldwide work force of about 16,000 as of October.

“The company tells us it makes too many types of trucks with too wide a range of components,” said Steve Shelton, president of UAW Local 402 in Springfield. “That cost structure has kept them from being competitive, they tell us.” He said the union will try to cooperate with the company.

Navistar shares closed down 12.5 cents at $9.375 in New York Stock Exchange trading of 961,900 shares, almost triple the three-month average of 339,600 shares. The shares have dropped about 44% from their 52-week high of $16.625 on July 17, reflecting the company’s difficulties in moving from 1995’s strong market to the current one.

Analysts said the announced plans don’t signal a sharp downturn in the company’s outlook but represent continued progress away from its serious financial problems of a number of years ago.

Management “fixed the company,” said Frank Prezelski, a Ladenburg Thalmann analyst. “They are in a position to make money during a downturn, and now it is time for it to start growing again.”

Navistar said the job cuts, to occur over the next three years, will be made in conjunction with a $269-million capital spending program aimed largely at modernizing production in Springfield and Chatham, Canada.