LISLE, Ill., April 13, 2020 /PRNewswire/ -- Navistar
International Corporation (NYSE: NAV) today provided an update on
actions it is taking in response to the COVID-19 pandemic.
As an essential business critical to supporting our country's
increasingly stressed supply chain, Navistar plans to continue
manufacturing operations at all plants subject to market
conditions, component supplier disruptions and the continued spread
and impact of COVID-19. Due to component supplier constraints, the
stoppage at Navistar's truck assembly plant in Springfield, Ohio has been extended through
early May. Navistar service facilities and parts distribution
centers are continuing regular operations, and up-to-the-minute
International Truck and IC Bus dealership hours can be found
at InternationalTrucks.com/covid19.
"Navistar is not immune to the reality of the COVID-19
pandemic," said Troy A. Clarke,
chairman, president and CEO. "The extent of this virus is
unprecedented, and our personal lives, businesses and global
economies are being impacted by events beyond our control. With
considerable uncertainties surrounding coronavirus, we have been
monitoring the situation closely and decided to take actions to
reduce costs and maximize financial flexibility and liquidity to
best position Navistar for the future."
The company is implementing a series of temporary cost reduction
measures to further preserve financial flexibility. Actions
include:
- A postponement of 30 percent of capital expenditures;
- A postponement of 30 percent of information technology project
spend;
- A deferral of $162 million in
pension contributions until 2021 under provisions of the CARES
Act;
- A deferral of employer payroll tax payments and certain
Employee Retention Tax Credits under provisions of the CARES Act as
guidance becomes available;
- A deferral of 35 percent to the base salary of the CEO and
board compensation;
- A deferral of 10 to 30 percent to the base salary of
U.S.-based, salaried exempt, non-represented employees;
- A reduced workweek by 20 percent for contractors.
Salary deferrals will be effective April
20 through December 31 and will be repaid with interest no
later than March 15, 2021. Other cost
reduction actions will go into effect immediately through
December 31.
These cost reduction initiatives are in addition to other
previously implemented employee-related actions including a
deferral of merit salary increases and a delay in 401k company match contributions until 2021. In
total, these measures conserve approximately $300 million in cash over the balance of the
company's fiscal year, ending October
31. Navistar will continue to diligently monitor business
conditions and consider additional actions as necessary.
As of April 10, Navistar's
consolidated cash and cash equivalents and manufacturing cash and
cash equivalents both exceeded $1
billion.
"We held a strong manufacturing cash position heading into this
pandemic, and the actions we are taking allow us to manage cash
flow in response to these extraordinary times," said Walter G. Borst, executive vice president and
chief financial officer. "These actions do not impact the
longer-term benefits of our Navistar 4.0 strategy but may influence
the timing of when the plan's full potential is realized, which we
will reevaluate once the post-coronavirus economy is better
understood."
About Navistar
Navistar International Corporation
(NYSE: NAV) is a holding company whose subsidiaries and affiliates
produce International® brand commercial trucks,
proprietary diesel engines, and IC Bus® brand school and
commercial buses. An affiliate also provides truck and diesel
engine service parts. Another affiliate offers financing services.
Additional information is available at www.Navistar.com.
Forward-Looking Statement
Information provided and
statements contained in this report that are not purely historical
are forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended ("Securities
Act"), Section 21E of the Securities Exchange Act of 1934, as
amended ("Exchange Act"), and the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements
only speak as of the date of this report and Navistar International
Corporation assumes no obligation to update the information
included in this report. Such forward-looking statements
include information concerning our possible or assumed future
results of operations, including descriptions of our business
strategy. These statements often include words such as believe,
expect, anticipate, intend, plan, estimate, or similar expressions.
These statements are not guarantees of performance or results and
they involve risks, uncertainties, and assumptions. For a further
description of these factors, see the risk factors set forth in our
filings with the Securities and Exchange Commission, including our
annual report on Form 10-K for the fiscal year ended October 31, 2019, and our quarterly report on
Form 10-Q for the period ended January 31,
2020 and our current report on Form 8-K dated April 13, 2020. Although we believe that these
forward-looking statements are based on reasonable assumptions,
there are many factors that could affect our actual financial
results or results of operations and could cause actual results to
differ materially from those in the forward-looking statements. All
future written and oral forward-looking statements by us or persons
acting on our behalf are expressly qualified in their entirety by
the cautionary statements contained or referred to above. Except
for our ongoing obligations to disclose material information as
required by the federal securities laws, we do not have any
obligations or intention to release publicly any revisions to any
forward-looking statements to reflect events or circumstances in
the future or to reflect the occurrence of unanticipated
events.
All marks are trademarks of their respective owners.
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SOURCE Navistar International Corporation