LISLE, IL-Navistar International plans to eliminate approximately 180 jobs and reduce operating costs by about $13 million annually by closing its foundry in Indianapolis, Ind.
Operations at the foundry, where Navistar currently produces engine blocks and heads, will be transitioned over the next six months and the foundry is scheduled to close in the summer of 2015.
“Over the last two years, we’ve taken a number of steps to strengthen our business and position the company for a return to profitability and long-term success,” said Persio Lisboa, Navistar’s president of operations. “We’ve determined that leveraging our suppliers for these components will reduce our engine costs, improve our overall manufacturing capacity utilization, and free up additional resources to invest in our core North America truck and parts business.”
The company took an $11 million charge in Q4 2014 that includes employee separation benefits, pension and other postretirement contractual termination benefits, inventory reserves and other related costs. In addition, the company anticipates up to $40 million in additional charges for accelerated depreciation related to the closure of the Indianapolis foundry and related impacts during the first half of 2015.
“Closing a facility is a difficult decision because of its impact on the many great people who’ve been part of our company,” Lisboa added. “We will treat people with dignity and respect throughout this process.”
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