Navistar International Corp. will move production for its Workhorse Custom Chassis Corp. subsidiary to a facility in Springfield, Ohio. As reported by the Springfield News Sun, Navistar closed down the Workhorse plant in Union City, Ind., this year.
The Springfield plant will transition the Workhorse truck chassis line into production in mid-2012. There are no predictions as to how many trucks that will add to production, and there are no immediate plans to add new jobs, said Steve Schrier, Navistar spokesperson. Workhorse was once a major player in the Class A gas motorhome chassis market, but no longer builds the platforms.
“This was announced to workers (Monday),” Schrier said. “It’s positive and good news for the people in Springfield.”
The new truck line is the second one Springfield has received from other Navistar plants. In 2008, Springfield began producing ProStar daybeds from the idle Chatham, Ontario plant, which allowed Springfield to recall some of the 250 workers laid off last October.
The new production line may not immediately bring new jobs, but it ensures that recalled workers can keep their jobs. The last of all laid off workers were recalled in August.
“This also shows we went from roughly 300 people on the assembly line growing toward 1,000,” said John Detrick, Clark County Commissioner. “This is the first time in a decade we’ve been in a position to potentially add jobs.”
Production has been steady enough that Navistar has actually added some temporary jobs this year. Schrier said temp workers take up about 3% of the work force, which is currently at 750 workers.
Bob Olson, the top executive of Winnebago Industries Inc. (WGO.N), said on Thursday he is not sure how high motorhome industry production will rebound once the market recovers, but said he is confident the business is nearing a turning point after five years of falling sales.
In an interview with Reuters, Olson, the company’s chairman, chief executive and president, also said he is not happy that one of Winnebago’s chief suppliers, Navistar International Corp (NAV.N), has entered the motorhome business itself by buying Monaco Coach Corp, the RV and trailer maker that filed for bankruptcy in March.
Navistar’s Workhorse Custom Chassis division supplies Winnebago with the platform for its biggest and most profitable motorhomes.
“I’ll tell you right now I don’t like the fact that I’m buying a major component from a competitor,” Olson said.
“They assure us that they are two separate entities. We’re still concerned. There’s no doubt about it.”
Winnebago and other motorhome manufacturers have watched demand for their pricey, gas-guzzling vehicles evaporate as a result of the current economic downturn and related credit crunch.
The industry expects to ship just 14,100 motorhomes this year — the industry’s worst showing in the 38 years data has been collected. That would be down over 50% from the 28,300 motorhomes the industry shipped last year and down over 80% the 71,800 vehicles it shipped in 2004.
Asked what he thought the new normal might be, Olson said he was not sure. But he said that since 1971, the industry has averaged 54,000 to 55,000 vehicle shipments a year.
“Now that’s a far cry from 2004,” he said. “But it’s also a far cry from the 14,000 wholesale rate we’re on now. I’d love it to be back at 55,000.”
Falling dealer inventory levels and a growing order backlog have encouraged Olson to believe the industry may be on the verge of a replenishment cycle.
“I think what’s going to happen is one day these (dealers) are going to wake up and say, you know, ‘Business is starting to improve.’ And they’re going to look out the window and realize they don’t have a lot of units out there that they can show their customers.”
He said the sharp decline in fuel prices over the past year, and the rebound in stock prices, are lifting consumer sentiment and making the job of selling motorhomes — which can easily cost $100,000 — a little easier.
“I think people are starting to recover and feel better,” he said. “That helps. People can look at their stock portfolios and 401(k)s, and they’re feeling better about themselves.”
But he said any replenishment cycle triggered by dealer restocking would be muted because the few remaining wholesale lenders have increased their scrutiny of the business, pressuring dealers to run lean.
“That will temper it somewhat,” he said. “I don’t think (the restocking) is going to be at the pace that we’ve seen in years past.”