Navistar announced on Aug. 3 that it will cease production of its medium-duty 9L and 10L engines at the company’s Melrose Park, Illinois, facility by the second quarter of 2018.
The change is part of Navistar’s transformation of the Melrose Park facility into a technical center that conducts truck and engine testing and validation as well as used truck sales and reconditioning. The majority of engines produced at the facility are 9- and 10-liter engines used in International Class 6 and 7 vehicles. Alternative engines are currently offered in all applications.
“Ceasing production of engines at Melrose Park is a difficult decision, but represents another important step on our journey to strengthening the company’s competitiveness,” said Persio Lisboa, Navistar chief operating officer. “Our N9/10 engine family was updated in 2014 and since then has served as a competitive niche offering for specific medium-duty vehicles. As we approach future regulatory requirements, the low-volume nature of the platform could not justify further product development investments on it.”
Navistar reintroduced the option of a 6.7L Cummins engine in 2013 and a 9L Cummins engine in 2016. The Cummins engines that are used in the medium-duty Class 6/7 segment are manufactured in Indiana and North Carolina, while Navistar’s big-bore engine plant, which makes engines for Navistar’s Class 8 trucks, is in Alabama.
The cessation of engine manufacturing at Melrose Park is expected to affect about 170 employees and reduce Navistar’s operating costs by about $12 million annually. The company will take an approximate charge of $43 million as a result of the action, including around $8 million in cash-related charges.