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January 8, 2018 9:45 AM, EST

Navistar Expects Strong Year for Truck Manufacturer

John Sommers II for TT

Navistar executives predict 2018 will be a strong year for the Springfield, Ohio manufacturer.

The company reported a profit of $30 million in 2017 — its first annual profit in six years — a result company officials called a breakthrough year for the truckmaker.

The company has rebounded over the past several years after weathering turmoil that included top management changes, legal struggles, a recession and a failed engine technology. Navistar has more than 1,800 workers at its Springfield manufacturing plant and thousands of retirees living in the area.

The last time Navistar had reported an annual profit was 2011.

Troy Clarke, Navistar’s president and CEO, said 2018 is also expected to be a strong year as the company expects strong demand for commercial trucks.

“Our 2017 was a breakthrough year, as we returned to profitability and grew our market share 1.5 points,” Clarke said. “These results were driven by stronger sales, our steady investment in the industry’s newest product lineup, early results from our strategic alliance with Volkswagen Truck and Bus and our ongoing focus on cost.”

The manufacturer also reported a fourth quarter net income of $135 million, compared to a $34 million loss at the same time last year. The revenue increase was largely driven by a 31% increase in the company’s truck sales in the U.S. and Canada, according to information from Navistar.

Clarke said the worldwide demand for commercial trucks is expected to improve.

“We think 2018 is shaping up to be one of the strongest industry years this decade,” Clarke said.

The company’s annual profit will directly benefit union employees, due to a profit-sharing clause in the most recent primary contract that calls for a $1,000 profit-sharing bonus, said Jason Barlow, president of the UAW Local 402, which represents the majority of workers at the plant.

Navistar’s Springfield facility produces medium, severe service and heavy duty commercial trucks, and the GM cutaway van on a separate line. The company will launch a new joint venture truck with GM next year. Those trucks will be available in both the International and GM brands, and will be produced with engineering input from both manufacturers.

The truckmaker’s rebound has been slow but steady, Barlow said. If demand increases, he said, it’s likely hiring would also increase locally.

“We’ve definitely turned that corner,” Barlow said. “We’re back to profitability. We know the future is looking bright for us in 2018.”

The company hit a particularly rough patch in 2012, when Navistar lost a big bet on new engines that didn’t meet emission standards and faced significant fines if it didn’t abandon the technology. It gave up ground to competitors as it struggled to recover from that blow, eventually switching to Cummins engines. At its low point, the Springfield plant had as few as 300 workers and local leaders feared it might close.

The plant’s ability to bounce back was the result of new leadership at Navistar’s corporate offices, along with cooperation by members of the UAW Local 402, said Michael McDorman, president and CEO of the Chamber of Greater Springfield.

The news that it turned an annual profit is a milestone for both the company and the local workforce, he said.

“It’s great news for the people that work at our local plant, as well as those who will go to work at our local plant and people who are looking for a job,” McDorman said. “They see Navistar doing well and it helps the local facility hire the people they need going forward.”

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