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Navistar Ending Mid-Range Diesel Production In Huntsville

Posted on February 20, 2014

Navistar International Corp. has announced that as the next step of its turnaround efforts, it will consolidate its mid-range diesel engine manufacturing to its Melrose Park, Ill., facility and end production of those engines at its Huntsville, Ala., plant. The company said it will continue to build its 13 L diesel at its Huntsville big bore engine plant.

"As we have stated previously, we have too much excess engine manufacturing capacity in North America and we must take action to reduce our costs and improve the business," said Jack Allen, Navistar chief operating officer. "The consolidation will further lower the company's breakeven point, strengthen our competitiveness in the marketplace and help position Navistar for a return to profitability."

Once completed later this summer, these actions are expected to eliminate approximately 280 jobs at Huntsville and reduce Navistar's operating costs by about $22 million annually.

"Ending production at a facility is a difficult decision because of its impact on the many great people who've been part of our company," Allen said. "We understand that these decisions have an impact on our employees and the community and we will treat our people with dignity and respect throughout this process."

This kind of move from Navistar was not entirely unexpected. Because of the company’s ongoing financial woes, its future as an engine manufacturer has been the subject of much speculation, particularly as it increased the number and volumes of Cummins diesels with selective catalytic reduction (SCR) technology in its vehicle lineup and continued to suffer high warranty costs for its own engines that use exhaust gas recirculation (EGR) as its primary emissions reduction technology.

Navistar has steadfastly maintained that it will continue to manufacture proprietary engines. While announcing it would use the Cummins ISB 6.7 L  engine for its International DuraStar medium-duty trucks and IC Bus CE Series school buses last fall, Bill Kozek, Navistar president North America Truck & Parts said flatly,  “No, we’re not exiting the engine business.”

But it was clear that with the costs involved with re-engineering its midrange engines to include SCR as well as maintaining separate engine manufacturing in Huntsville and Melrose Park, something was likely to give.

The Huntsville plant, officially International Diesel Of Alabama LLC, covers 650,000 sq.ft. on approximately 45 acres and primarily assembles Navistar’s 6.4 L (220 to 300 hp), 7.6 L (215 to 300 hp) and 9.3 L (310 to 330 hp) engines.

The site was originally an engine and generator set manufacturing facility for Onan Corp. and after Onan’s acquisition by Cummins, the original Cummins A series small diesel engine was built there.

That engine was discontinued and in 1997, Cummins opted to consolidate its Onan operations in Minnesota and the plant was closed. The facility lay fallow for two years until it was purchased by International in 1999. For the better part of two years, International reconfigured and modernized the facility until it began producing engines again in the spring of 2002.