Navistar to cut 700 jobs, some in Lisle, after income plunges
Navistar is cutting about 700 jobs, including some at its headquarters in Lisle, after it reported third-quarter income plunged 94 percent.
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Lisle-based Navistar International Corp. today said it will cut roughly 700 jobs worldwide, including an untold number at its headquarters in Lisle, after it posted third-quarter results showing that net income fell 94 percent.
Navistar said it's completing a buyout program to cut jobs, which is expected to save about $70 million to $80 million a year. The company wants to cut expenses as much as $175 million annually starting in fiscal 2013, which begins Nov. 1.
"It is safe to say that with a significant portion of our salaried workforce located at the Lisle campus, that there are some reductions taking place at Lisle," said Navistar spokeswoman Karen Denning.
The company did not specify the number of job cuts in Lisle, however 500 voluntary separations are taking place companywide while another 200 "involuntary separations" are likely in the fourth quarter.
"Salaried positions at all levels of the company are being impacted," Denning said.
Navistar, which moved its longtime headquarters from Warrenville to Lisle last year with about 3,000 workers, reported its third-quarter net income was $84 million, or $1.22 a share, compared with $1.4 billion, or $18.24, a year earlier.
The 2012 quarter included a $196 million tax benefit while the year-earlier period had a $1.46 billion benefit, according to a statement. The adjusted loss was 20 cents a share, the company said in a regulatory filing. The average estimate of 15 analysts surveyed was for a loss $1.41 a share. Navistar had a pretax loss of $100 million in the quarter ended July 31.
Sales fell 6.2 percent to $3.32 billion, compared with $2.95 billion, the average estimate of 11 analysts' estimates.
Navistar withdrew its 2012 forecast Aug. 2 after disclosing a U.S. Securities and Exchange Commission inquiry. On Aug. 27, the company said CEO Dan Ustian had stepped down "effective immediately." The company named former Textron Inc. CEO Lewis Campbell executive chairman and interim chief. He said today he expects "significant improvements" in the next 12 to 18 months.
"Clearly we are not pleased with these results," Campbell said in the statement. "I believe we have a good line of sight and a keen sense of urgency for moving forward."
Campbell said the company is reviewing its "noncore" businesses. The company isn't issuing a forecast for the current quarter, according to the statement.
Navistar said it's cooperating with a request from the SEC related to accounting and disclosure matters, according to an Aug. 2 regulatory filing. The company also has been under regulatory pressure after a new engine failed to meet U.S. emissions standards.
Ustian, 62, had been Navistar's chairman, president and CEO since 2004.
The company also said Aug. 2 it reached a supply agreement with Columbus, Indiana-based Cummins Inc. on an engine that will comply with Environmental Protection Agency 2010 emissions standards. Cummins will provide Navistar with its urea-based aftertreatment system, which will be added to Navistar's in- cylinder engine.
Navistar said today it's "on track" to complete the Cummins accord by the end of October.
Navistar also saw its shares slide 39 percent this year. Even billionaire activist and investor Carl Icahn, known for grabbing shares that eventually forced Motorola Inc. to split into two companies in early 2011, along with hedge-fund manager Mark Rachesky have increased their stakes in Navistar.
•Bloomberg News contributed to this report.
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