GARLAND (CBSDFW.COM) – Navistar International Corporation announced on Tuesday its intentions to close its Garland, Texas, truck manufacturing operation by the first-half of 2013. The plant currently employs 900 salaried, hourly and third-party temporary workers.
“Closing a facility is always difficult because of its impact on the many great people who’ve been part of our company,” said Troy Clarke, Navistar President and Chief Operating Officer in a news release. “But the fact is that Navistar has too much manufacturing capacity in North America and we must take quick action to improve our business and position the company for long-term success.”
In an effort to “reduce costs and optimize its manufacturing footprint”, the truck volume produced in Garland will transition to other North American operations, which currently build smaller models. The closure is expected to reduce the company’s operating costs by $25-$35 million annually.
“We understand that these decisions affect employees and the community,” Clarke added. “We will treat people with respect and provide support to help them with their transitions.”
Annette Wallace, who celebrated her 9-year anniversary at Navistar on Tuesday, says her co-workers are shaken up by the news of the closure.
“People (are) nervous, anxious,” she described. “They’re upset. Some people say they don’t know what they’re going to do.”
Garland’s mayor, Ronald Jones, says the plant brings in more than 750 thousand dollars in revenue annually. He says the city’s economic development team is developing a plan to address the plant’s shutdown.
“First of all, to take care of those employees, secondly to get someone in here to fill that spot and keep our economic situation booming.”
Navistar will record a fourth-quarter charge used primarily for employee separation benefits, which is not expected to exceed $10 million on a pre-tax basis.
Company stocks are down 51 percent on the year in advance of Wednesday’s opening of the stock market following a two-day closure for Hurricane Sandy.
The Navistar plant in Garland has been the company’s primary site for the manufacturing of heavy-duty trucks in recent years. The plant is located at 810 Easy Street between Plano Road and Garland Road in Garland.
Also Check Out: