Navistar Idles Ohio Truck Plant For Two Weeks

Navistar International Corporation NAV is suspending production of International and General Motors products at its truck assembly plant in Springfield, Ohio for two weeks because of supply chain disruptions related to the coronavirus pandemic.

Navistar also pulled its financial and industry production guidance on Monday, March 23. The company said on March 4 that a revision to its fiscal year ending October 31 was possible depending on impacts from coronavirus. Navistar said its 2020 financial performance would be affected but it could not be specific.

The company had $1.0 billion of consolidated cash and cash equivalents on hand as of January 31, and its Financial Services arm had money available under a $748 million revolving bank credit facility, as well as access to other funding sources in the U.S. and Mexico.

The Navistar plant, located between Dayton and Columbus, Ohio, builds Class 4-8 medium- and heavy-duty trucks for Navistar's International brand. It also builds Class 4-5 Silverado pickup trucks for GM's Chevrolet brand. GM said March 18 it would idle all of its passenger car and light-duty plants in North America until March 30.

This is the second shutdown in six months of GM production in Springfield, where 5,000 units of Silverado production was lost during a 40-day United Auto Workers strike last fall.

Because of falling industry volumes and the exits from several markets, Navistar announced on December 17, 2019 that it would reduce its worldwide workforce 10%, or about 1,300 jobs.

Navistar became the second of four major truck manufacturers to suspend production, following the Volvo Group's announcement on March 20, that it was temporarily halting Volvo and Mack truck production at plants in Virginia and Pennsylvania as well as a powertrain plant in Maryland. 

Volvo's Swedish parent AB Volvo VLVLY also predicted a negative material impact on 2020 earnings.

So far, industry volume leader Daimler Trucks North America is maintaining production.

"The supply chain continues to be relatively stable, allowing us to continue to deliver trucks on time. So far this month, our on-time-delivery rate continues to be at a very high level," Daimler said in a letter to customers on Friday, March 20.

A Daimler employee test positive for COVID-19 last week at Daimler's Detroit Powertrain campus in Michigan. The plant was scheduled to reopen Monday after being closed to clean and disinfect.  

PACCAR Inc. PCAR has declined to respond to FreightWaves queries on impacts from coronavirus.