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Navistar closing Indianapolis foundry

16 December 2014

Navistar will close its foundry operations in Indianapolis, IN, where it currently produces engine blocks and heads for its engines. In the future, Navistar intends to source these components “from the supply base”. This transition would occur during the first half of next year, and the company expects to complete the foundry closure in the summer of 2015.

Once completed, closing the foundry is expected to eliminate 180 jobs and reduce Navistar’s operating costs by about $13 million annually. The company took an $11 million charge in Q4 2014 that includes employee benefits, inventory reserves and related costs. In addition, the company anticipates up to $40 million in additional charges for accelerated depreciation related to the closure.

The Indianapolis foundry was slated to close in 2009—after Navistar stopped making engines for Ford—but the plant remained open on a scaled-down basis after a five-year deal was reached with UAW Local 226 workers. The contract reduced vacation time, holidays and pay.

The foundry casts gray and ductile iron engine blocks, while most of Navistar MaxxForce engines utilize compacted graphite iron (GGI) blocks and/or heads. The plant would apparently require a significant investment to make it relevant to the Navistar existing product line.

Source: Navistar