Word of changes at Navistar wasn’t entirely unexpected. More than 500 jobs leaving Wakarusa? That information was a surprise.
“There have been rumblings they were going to sell,” Wakarusa Town Manager Jeff Troxel said Friday afternoon. “As far as the moving of the purchase to somewhere else, that was news. …Obviously, we didn’t want to see that happening.”
As reported by the Goshen News, Navistar Inc. officials announced Thursday (May 16) that Allied Specialty Vehicles (ASV) had purchased Navistar RV assets. The sale includes the manufacturing operations for Monaco and Holiday Rambler brand RVs in Wakarusa and for Navistar’s R-Vision and Holiday Rambler towable units in Harrisburg, Ore. ASV has also entered into a multiyear leasing agreement for Navistar RV’s Elkhart facility.
Company officials said manufacturing operations in Wakarusa will be moved to ASV’s Decatur, Ind., campus, a shift that will impact 520 local workers.
Troxel sounds optimistic about both the Navistar facility and the workers affected by the sale. “I’m fairly confident someone is going to purchase that building,” he said.
He said the site includes a state-of-the-art painting facility and a fantastic office area. “The building is pretty big,” Troxel said. “I would think somebody would want that.”
As for those Navistar workers who don’t want to move to Decatur, Troxel feels whoever buys the Navistar facility will likely have jobs for them.
Dorinda Heiden-Guss, president of Economic Development Corp. (EDC) of Elkhart County, said the news was also a surprise to her.
She said she expects Wakarusa to secure a new occupant for the Navistar facility, but in the meantime, the EDC is working with WorkOne to assist Navistar employees prepare to look for new jobs.
“We have RV corporations who are trying to find quality workers,” Heiden-Guss said. “We would hope many of these employees from Navistar would be able to find other positions in the county due to the upswing in the RV market.”
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In the wake of its announced acquisition of Navistar Inc.’s RV operations, Allied Specialty Vehicles (ASV) has begun assembling the pieces for its emergence as a major player in the motorhome segment.
Faced with a raft of organizational and engineering challenges, ASV has mapped out a strategy that will consolidate the building of four high-profile motorhome brands at its campus in Decatur, Ind., while also realigning its corporate structure.
“We will be manufacturing four very iconic motorhome brands – Fleetwood, Monaco, Holiday Rambler and American Coach – all with strong recognition in the marketplace, a loyal customer base and tremendous dealer networks,” noted John Draheim, president and CEO of Fleetwood RV Inc., a division of Orlando, Fla.-based ASV.
As part of the buyout, ASV purchased all of the equity interests of Navistar RV, including manufacturing operations for Navistar’s R-Vision and Holiday Rambler towable units in Harrisburg, Ore., and Navistar’s Monaco and Holiday Rambler brand motorized RVs in Wakarusa, Ind. ASV, which is owned by private equity firm American Industry Partners, has also entered into a multi-year leasing agreement for Navistar RV’s Elkhart, Ind., plant, a former Roadmaster chassis facility that houses towable operations. The sale does not include Bison Coach, Navistar’s horse trailer manufacturing business.
“Towable operations will not be impacted,” said Draheim. “The Roadmaster chassis is currently being assembled in an out-building in Wakarusa. We haven’t made a decision if we will continue to build chassis.”
Phasing out Operations in Wakarusa
The most imposing challenge will be the phasing out of operations in Wakarusa while preparing for a ramp-up of production in Decatur where ASV operates facilities encompassing 558,500 square feet of manufacturing space. Currently around 412,000 square feet are being utilized for Fleetwood/American Coach production.
“We are going to continue to build units in Wakarusa for the next three or four months, fulfilling all of the commitments already on the books,” Draheim said. “I anticipate that the last unit will run down the line sometime in August. At the same time, we’ll be implementing a parallel project in Decatur to prepare for the move.”
Draheim reported that the relocation will impact around 500 workers at the Wakarusa plant, 400 involved in production work. “The balance are in product development and engineering, and we are hiring people from those groups. Parts and service will not change.”
Draheim said that while production will continue, the work force will be incrementally pared down. Employees, who were meeting with management today, would be considered for openings in Decatur.
“I don’t see us starting production in August or even September,” he said, “so I don’t know if people will be able to wait that long. Our intent is to sell the Wakarusa facility. We have already received interest from a few industry companies where people would be able to find employment.”
He added, “Our top priority is taking care of these people who lost their jobs.”
Launch of a New Era for ASV
Draheim said that initially ASV would essentially be setting up two companies in Decatur.
“We will be forming two separate business units – Monaco/Holiday Rambler and Fleetwood/American Coach,” Draheim said. “Sales, marketing, product development, parts and service will all run independently. Long-term that may change. I can envision how the two companies and four brands will fit under the ASV umbrella.”
Product development, however, remains at the forefront.
“We will be adding additional product development/engineering resources to those inherited in the deal from Navistar, as we view product as an extremely important component for success,” he said. “One of our main goals will be to further differentiate the brands. Monaco was the premier luxury motorhome in the market, but Navistar tried to change the product through its engine strategy. They tried to make Monaco something it’s not.”
Draheim said that the production side would not be immediately impacted, noting that RV sales had been dropping since Navistar Inc. announced last October that RVs represented a “non-core” business.
“At the volumes we’re running today, we’ll be able to integrate production in Decatur without changing our facilities,” he said. “As volumes increase, we may need to reconfigure.”
ASV’s management structure will also be in a state of flux while operations are merged. Draheim will continue to head up Fleetwood/American Coach while longtime Monaco executive Mike Snell has been named as president of Monaco/Holiday Rambler. Bill Osborne, president of Navistar RV, will not be part the new team.
“Mike will be reporting to ASV COO Jim Meyer, who is also acting COO for Fleetwood,” Draheim said. “We are currently conducting a job search to fill the Fleetwood slot so Jim can concentrate on his corporate responsibilities.”
He added, “In the next 60 to 90 days we will announcing a new management structure. I can foresee a corporate ASV RV umbrella with two business unit presidents and one COO to oversee operations. Right now, we are wading our way through all the changes and are focusing on implementing a plan that makes sense.”
What looked so promising in 2012 with Monaco RV adding 400 jobs in Wakarusa, Ind., is now moving in the opposite direction.
The South Bend Tribune reported that in August, the company will ramp down its operations at its Monaco RV and Holiday Rambler plants and move operations to Decatur, Ind. That’s what about 520 employees at the two plants learned Thursday.
Allied Specialty Vehicles announced Thursday the purchase of Monaco RV, Holiday Rambler and R-Vision recreational vehicles, including the Beaver and Safari brands, from Navistar Inc.
R-Vision is produced in Elkhart and will remain unaffected by the purchase, Jim Meyer, COO of Allied Specialty Vehicles, said Thursday.
But it’s a far different scenario for employees in Wakarusa, 425 of whom work in manufacturing.
“The initial part of the plan is to not take more production orders for Wakarusa,” Meyer said. “We have production now that will run into August.
“We will keep that production here, and then we will begin to ramp down the manufacturing part of the business in Wakarusa.”
Meyer said that American Industrial Partners, the private equity firm in New York that owns Allied Specialty Vehicles, has been interested in purchasing the RV brands for some time. He said the timing was right and their bid was selected.
“The companies are in difficult financial times,” he said. “That’s a fact. We feel very confident in our ability to work our way through the financial piece of this thing and restore these brands back to where they’ve been most of their lives.”
ASV’s attempt to do so, though, means the brands will move to Decatur, near Fort Wayne, where the company’s plants already produce RV brands Fleetwood and American Coach, Meyer said.
“We have a large campus today in Decatur, and the very straightforward and obvious integration is to move this business to Decatur, rather than go the other way for a whole lot of logistical reasons,” he said.
One of the reasons for the move, Meyer said, is the Wakarusa plants’ size.
“There are world-class production facilities here (in Wakarusa),” he said, “but they are too large for the size of the business.”
ASV plans to sell the facilities in Wakarusa, and Meyer’s hope is that many of the workers there will find work at whatever business ends up buying the plant.
“We’re going to have a plan as good as we can make it for each and every employee to help them with this wind down and transition for future jobs,” he said, adding that he’s confident the Wakarusaoperations will be sold.
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Navistar International Corp. posted a second-quarter net loss of $172 million, or $2.50 per share, compared to net income of $74 million, or $0.93 per share, a year ago. Adjusted net loss was $137 million, or $1.99 per share, versus net income of $102 million, or $1.30 per share, last year.
Sales and revenues for the quarter were $3.3 billion compared to $3.36 billion in the prior year. Results included unfavorable shifts in military product mix reflective of lower military budgets, industry-wide higher commodity and fuel costs, an asset impairment charge of $28 million relating to the company’s decision to idle its Workhorse Custom Chassis business, and a charge for $24 million for certain extended warranty costs.
“Certainly, our first half performance was unacceptable. It included a warranty reserve to repair early 2010 and 2011 vehicles,” said Daniel C. Ustian, chairman, president and CEO for Navistar, parent to Monaco RV LLC. “We were also affected by speculation surrounding our engine certification for our Class 8 engine, which is why we are working tirelessly with the U.S. EPA to get resolution.”
The company further announced a management realignment designed to give momentum to its strategy of “great products, competitive cost and profitable growth.” Troy Clarke, currently president of Navistar Asia Pacific, will assume responsibility for all Navistar’s operations in the newly-created role of president, Truck and Engine.
Jack Allen will become president of North America Truck and Parts, an expansion of his current role, and Engine Group President Eric Tech will expand his role to become president of Global Truck and Engine, responsible for all of our business operations outside of North America. The changes will take effect from July 1, following board approval.
Looking forward, for fiscal year ending Oct. 31, Navistar expects adjusted net income to be between break-even and $140 million, or $0 to $2.00 adjusted earnings per share. Analysts expect the company to earn $3.73 per share for the year.
To view the entire report click here.
Negative news about jobs sent the markets nose-diving last week as the Labor Department said employers hired just 69,000 workers last month, less than half of what was expected.
Despite that negative news, Monaco RV is in the process of adding 250 new jobs at its plant in Wakarusa, Ind., according to a report by WSBT TV.
Only four years ago, Monaco cut about 1,400 workers and filed for bankruptcy. Since then, the manufacturer was purchased by Navistar Inc. and employment has been steadily climbing.
“I start my job today,” David BeMiller, a new hire said.
BeMiller is just one of the nearly 250 new employees Monaco is hiring. He’s worked in the RV industry nearly his entire life, but like many RV workers, he had been laid off for several months.
“I kept on looking for jobs and it seemed like there wasn’t much of anything out there,” he said.
This is just the latest job announcement for Monaco. In August, the company consolidated its motorhome operations in Oregon with the factory in Wakarusa. That brought about 300 new jobs to the Elkhart County factory. Now, the company is ramping up production and needs to add to its work force.
“We’re ramping up production as we speak,” Bill Osborne, vice president of custom products for Navistar’s Monaco and Workhorse Custom Chassis LLC subsidiaries. “We started diesel production and we’re currently building 15 per week and are on our way to ramping up to 22 per week in late June time period.”
Osborne says adding jobs has been the plan since the move from Oregon.
Despite the most recent job numbers that were much lower than expected, he says the RV industry is on the rebound.
“What happens with one month’s job numbers may mean something for those whose business plans go to quarter to quarter, but our goal is to be in this for the long haul.” Osborne said.
Monaco RV now employs more than 550 hourly workers, plus around another 100 administrative employees.
A job fair at the Wakarusa facility was held last week.
The Monaco RV LLC plant in Wakarusa, Ind., is ramping up production of its diesel-powered motorhomes. That means it expects to hire another 125 workers between now and the end of April, according to a report by WSBT TV, South Bend.
Its parent company, Navistar Inc., recently consolidated a diesel motorhome operation from Coburg, Ore., moving that production to Wakarusa. There are currently 175 workers at the plant, which began manufacturing operations in February.
Bill Osborne, vice president of custom products for Navistar’s Monaco and Workhorse Custom Chassis LLC subsidiaries, noted that the company has been preparing the facility since last fall when it announced its consolidation plans.
He noted that with a launch of this size, it was important “that we didn’t ramp up quickly, making sure the quality is right.”
To view an accompanying video from WSBT click here.
Navistar, Inc. has unveiled a new 70,000-square-foot product support center in Woodridge, Ill., that includes a large office area, three classrooms, a photo and video studio, a computer lab, a tool development and fabrication shop and 50,000 square feet of hands-on training space for dealer and fleet technicians.
“Navistar is committed to providing the best vehicle uptime and customer support in the truck industry,” Vaughn Allen, vice president, global service, said in a press release. “Our state-of-the-art center houses all product support and education personnel under one roof — which will facilitate the rapid development of tools, service information, technologies and training, to support our Navistar brands globally.”
The center is home to 80 employees who work in the following functions:
• Training for customer, dealer and Navistar sales, parts and service personnel
• Entry-level technician recruitment for U.S. dealers
• Standard repair time development
• Publications, authoring and development
• Special tools and diagnostics development
• Vehicle component system subject matter experts
As a full-time training facility, the center will host dozens of dealer and customer technicians each day for in-depth, hands-on training.
Navistar Inc., parent to Monaco RV LLC and Workhorse Custom Chassis LLC, announced that Jim Spangler has been named chief communications officer and will lead the company’s corporate communications globally.
“We are proud to have Jim join the Navistar team and are confident that his proven leadership and experience in our industry will help continue to build Navistar’s reputation in the global marketplace”
“We are proud to have Jim join the Navistar team and are confident that his proven leadership and experience in our industry will help continue to build Navistar’s reputation in the global marketplace,” said Daniel C. Ustian, Navistar chairman, president and CEO.
A 26-year communications veteran, Spangler brings to Navistar a wide range of communications experience. He spent nearly 12 years with Tenneco, where he served as vice president of global communications and was responsible for corporate positioning, communications strategy and policy, executive communications, employee communications, media relations and public relations.
Before joining Tenneco, Jim was director of global public relations and media relations for Arthur Andersen. Jim also spent nearly eight years at Amoco Corporation in roles of increasing responsibility within the company’s public and government affairs group. Spangler began his career as a reporter at City News Bureau of Chicago.
“I have admired Navistar’s growth during one of the most challenging times for our industry,” said Spangler, “and I look forward to leading the company’s communications efforts as it continues to deliver great products and profitable growth.”
Spangler holds a bachelor’s degree in communications from the University of Illinois. He is a member of the Arthur Page Society and the Public Relations Society of America.
Navistar Inc.’s influence was evident in Monaco RV LLC’s 2012 product rollout during the company’s Dealer Congress this week, as the world-class truck manufacturer continues to implement design, engineering and cultural changes since acquiring Coburg, Ore.-based Monaco in June of 2009.
With former Navistar board member and auto industry veteran Bill Osborne set to take over the reins on July 1, Monaco showed several 2012 motorhomes sporting a distinctive, truck-enhanced front end and grille design – first introduced a year ago on the 32-foot Vesta Class A – that creates a familial look throughout the motorized lineup.
“The things we are doing now are things we couldn’t even imagine before we became part of Navistar,” said Mike Snell, senior vice president of sales and product development, speaking during the general session of the June 20-22 event at the Gaylord Texan Resort in Grapevine, Texas. “And we are definitely doing things that no one else in the industry is doing.”
As a key example, Snell pointed to the “successful integration” of Navistar’s MaxxForce engines with Monaco RV’s Roadmaster chassis, representing the “first fully designed and integrated motorhome platform in the industry” in which engine, body and chassis are all manufactured by the same OEM.
Topping the 2012 product rollout was the debut of longer 35-foot floorplans in the diesel-powered Monaco Vesta and Holiday Rambler Trip Class A lines equipped with a second slideout, full walk-around bedroom and increased seating. Development of the new models was “designed in close conjunction with Navistar,” stated Snell.
On the gas side, Snell said the company had introduced a new entry-level coach in the Monaco LaPalma Class A line, featuring “the family design characteristics shared with the Vesta,” and a new floorplan in the Monarch Class A series offering a new bath-and-a-half layout.
Snell was quick to note that Monaco had also “recommitted” to its towable division.
“We have created an entirely separate towable division with its own product development and manufacturing team,” Snell said. “We brought in Keith Griffin and Dave Terry to head a separate management group for the towable division.”
Headlining the 2012 towable introductions was the return of R-Vision’s Trail Lite, featuring two new fifth-wheels and a travel trailer – all capable of being towed with half-ton trucks.
“Taking today’s economic times into consideration, R-Vision is going back to its roots and focusing on what made it successful – being the lightweight leader,” said Snell.
In the wood-and-aluminum sector, Monaco showed new sharply priced R-Vision Silver Creek and Holiday Rambler Traveler models offering entry-level, non-slide floorplans. “One 26-foot bunkhouse model will come fully loaded for under $10,000,” Snell noted.
Other highlights from the meeting included:
• An initiative offering Monaco parts sales online through Navistar’s parts distribution center at its home base in Chicago. “This is the first of a number of parts distribution centers where we will be shipping RV parts and accomplishing our fulfillment commitments to you,” said Snell.
• Newly introduced diesel products equipped with a first-in-class Bendix steering column that adjusts both up and down as well as offering telescoping capabilities. The column comes in through the dash, improving pedal and driver foot positions, giving motorhomes the look and feel of driving a luxury SUV.
• An integrated key system that not only starts the vehicle, but also unlocks bay doors, entry doors and other exterior access points.
• An RV savings rebate promotion designed to turn over dealers’ in-stock units with “no strings attached.”
• Significantly revamped websites to give brands a “whole new look and feel,” with the ultimate goal of providing greater product differentiation and focus on specific segments of the marketplace.
Warrenville, Ill.-based Navistar, Inc. has been awarded a development contract by the United States Postal Service (USPS) under which Navistar will engineer a diesel powertrain replacement for USPS delivery vehicles.
According to a press release, Navistar’s re-powered diesel vehicle effort is designed to significantly reduce the escalating service and fuel costs associated with the USPS’s aging fleet.
Under terms of the contract, the USPS will deliver one of its Long Life Vehicles (LLV) to Navistar Engine Group’s Engineering and Technical Center in Melrose Park, Ill., where the company’s in-house re-power engineering department will develop, install and test a diesel powertrain that features Navistar’s MaxxForce 3.2-liter turbodiesel engine. Financial terms were not disclosed.
“When the USPS current fleet was first put into service, diesel fuel and advanced diesel powertrain technology were not widely available,” said Andrew Dondlinger, vice president, North America operations, Navistar Engine Group. “Now, by replacing its gasoline powertrains, USPS could realize diesel’s benefits of fuel efficiency, long operational life and low service and operating costs.”
A proven diesel re-power solution could be used to upgrade USPS vehicles over the next decade. It is not uncommon for diesel powertrains to achieve fuel economy gains of up to 35% when compared to gasoline powertrains. Further savings would be gained from diesel’s lower maintenance requirements, longer service life, and overall lower cost of ownership.
Navistar estimates the USPS could realize payback on each re-powered vehicle in as little as two years depending on maintenance and fuel costs.