Navistar (NAV) to Close Garland, TX, Manufacturing Plant; Sees Up to $10M Charge in Q4
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Navistar International Corporation (NYSE: NAV) intends to close its Garland, Texas, truck manufacturing operation as part of its efforts to reduce costs and optimize its manufacturing footprint. Navistar intends to cease operations at the Garland facility by the first half of 2013.
Truck volume now produced at Garland will transition to other North America operations that currently build similar models beginning in January 2013.
The Garland facility currently employs approximately 900 salaried, hourly and third party temporary workers.
Once completed, the Garland closure is expected to reduce Navistar's operating costs by $25-$35 million annually. The company will record a fourth-quarter 2012 charge, primarily for employee separation benefits, which is not expected to exceed $10 million on a pre-tax basis. As the closure plan is implemented during the 2013 fiscal year, the company expects to record certain pre-tax charges, primarily related to accelerated depreciation and other related items, ranging from $30-$50 million dependent upon determination of fair value. Navistar projects this action will be cash flow positive in year one.
Truck volume now produced at Garland will transition to other North America operations that currently build similar models beginning in January 2013.
The Garland facility currently employs approximately 900 salaried, hourly and third party temporary workers.
Once completed, the Garland closure is expected to reduce Navistar's operating costs by $25-$35 million annually. The company will record a fourth-quarter 2012 charge, primarily for employee separation benefits, which is not expected to exceed $10 million on a pre-tax basis. As the closure plan is implemented during the 2013 fiscal year, the company expects to record certain pre-tax charges, primarily related to accelerated depreciation and other related items, ranging from $30-$50 million dependent upon determination of fair value. Navistar projects this action will be cash flow positive in year one.
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