Navistar won’t talk, Bentley won’t talk – This can’t be good

by Steve Wiggins
1 comment

THE SHOALS – When it was announced in September, 2011 that Navistar International Corp. would take over the National Railcar Assembly Plant, Shoals business leaders breathed a huge sigh of relief. That warm feeling that everyone was feeling 14 months ago has apparently dissipated.

Navistar is in trouble. In the ensuing months, the expansion of the plant’s 150 person workforce has not increased as promised. Navistar’s tribulation started with the introduction of its new 13 liter-class truck engine. The motor did not meet EPA requirements. Navistar, for a number of years, relied on already banked EPA pollution credits that it cashed in with every engine it delivered. Once those credits ran out, the company was required to pay a nearly-$2 thousand fine on each engine it delivered. This sent the company into a financial crisis.

 

 

  • Navistar was delisted from the New York Stock Exchange; dropped from the S&P 500.
  • Closing a plant in Texas to save money. 900 employees laid off.
  • Announced in October that it is looking to sell off assets to raise cash.
  • Authorized the sale of up to 11-million shares of common stock to raise cash (which dilutes the overall value of its already outstanding shares).

Navistar’s efforts to shore up its core truck and engine business is crucial, analysts say. But according to published reports, this one from Waste Recycling News, “those businesses are the most troubled, due in large part to declining truck sales and a botched effort to produce a diesel engine that meets federal emissions standards. In the third quarter Navistar lost $30 million in its trucking segment and $47 million in its engine division.”

Barton Riverfront Industrial Park
Photo: SEDA

Navistar is planning to rush forward an improved engine, supposedly ready for sale in 2013. However, it was announced by Governor Robert Bentley, Retirement Systems of Alabama C.E.O., Dr. David Bronner, and others, most notably The Shoals Economic Development Authority, that the Navistar acquisition of Barton would result in jobs… Lots of jobs. But, to date, and no doubt because of the fragile state of the company, nothing is happening at the mile-long facility. And no one is talking.

Governor Bentley at TASUS groundbreaking.

The Quad-Cities Daily pulled Governor Bentley aside at a ground breaking ceremony in Florence in September to ask him his thoughts on Navistar’s problems vis-a-vis Barton. When we brought him up to speed on the lack of progress, The Governor candidly replied that he wasn’t a hundred percent informed on the issue. He promised to get to the bottom of the issue and respond to us. After several e-mails to Governor Bentley with respect to this issue, we have received nothing. However, in the ensuing weeks, The Quad-Cities Daily has received numerous communications from his Office on any number of different matters… Just nothing on Navistar. It is apparent that in this case, no news is NOT good news.

The Quad-Cities Daily has made several attempts to reach Navistar’s Communications Director, Mike Peques, on this matter. To date, there has been no information forthcoming that could enlighten the stake holders of The Shoals.

We will keep trying to get to the bottom of this story.

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1 comment

JANE November 8, 2012 - 7:25 am

Lie, lies, lies. – just like those 7000 new jobs promised in Lisle IL.
It’s no wonder the SEC is investigating Navistar on issues related to required legal disclosure of known severity of risks of their business strategy.

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