Rush Enterprises announced the implementation of a plan for consolidation of its Navistar Division dealership network to reduce expenses and remain efficient in affected areas of operation.

The plan includes closing Rush Truck Centers in the following locations on May 1, 2016: Kankakee, Decatur, Ottawa, Mount Vernon and Grayslake, Ill., Ontario, Ore., Findlay, Ohio and Statesville, N.C.  Rush Truck Centers formerly located in Brazil, Indiana; and Helper, Utah, were closed in the first quarter of 2016.

As a result of acquisitions, the company currently has two locations in each of Augusta and Tifton, Ga., which will be consolidated into one location in Augusta and one location in Tifton on June 1, 2016.  The company will also consolidated its Peterbilt location in Alice, Texas, into its newly constructed Corpus Christi, Texas, location in the first quarter of 2016.  In total, the company expects to close 13 Rush Truck Centers in the first half of 2016.

"It's never easy to make the decision to close a Rush Truck Center," stated W.M. Rush, chairman, CEO and president of Rush Enterprises. "However, as we acquired dealership groups across the country in recent years, we acquired a number of small dealerships located in close proximity to one another. Many of these dealerships have been in existence for a long time, but with changes in technology and, in certain cases, the local markets, there is no longer an economic justification for the affected dealerships to operate in such close proximity to our other dealerships.”

The facility consolidations are expected to cost Rush an approximately $4 million to $6 million. A majority of the charge will be taken in the first quarter of 2016, with the remainder expected to occur in the second quarter of 2016.

The charge is expected to consist of approximately $400,000 in severance and related benefits, plus $3.6 million to $5.6 million in facility exit costs, including impairment charges to certain fixed assets and the value of the real estate underlying the locations that will be classified as held-for-sale. Approximately $750,000 of the severance and related benefits and facility exit costs are cash costs, a significant majority of which are expected to be paid during fiscal year 2016.

The company plans to classify certain excess real estate as held-for-sale, which will result in impairment charges of $4.9 million in the first quarter of 2016.

"Consolidation of our dealership network is an important part of our plan to reduce expenses in 2016,” said Rush. “As always, we remain committed to meeting the needs of our customers, and I commend our employees for maintaining excellent customer service while reducing costs across the organization.”