Workhorse chassis work will go to Monaco

Navistar Internationa Corp. adding more production to Monaco RV plant in Indiana

Posted on June 14, 2012 at 1:00 a.m.

WAKARUSA — The decision by Navistar International Corp. to idle its Workhorse Custom Chassis operation will not bring an end to its entire chassis production.

Instead, the recreational vehicle chassis manufacturing will be shifted to Navistar’s subsidiary Monaco RV, bringing more work and more jobs to the plant on Nelson’s Parkway, according to Navistar spokesman Steve Schrier. Monaco is in the process of hiring 250 new employees to help with the incoming chassis work as well as the additional motorhome production.

Navistar, based in Lisle, Ill., included the announcement about shuttering Workhorse when it released its second quarter results for the fiscal year 2012. The vehicle and engine manufacturer posted a loss of $172 million during the quarter, largely because of $104 million in warranty charges to repair its engines.

Navistar chairman, president and CEO Daniel C. Ustian called the company’s six-month performance “unacceptable” but said the business has a path for delivering strong profits in the second half of the year.

However, during a conference call, analysts were skeptical. They peppered Navistar executives with questions about the warranty charges and ongoing problems with the company’s Class 8 engine not being in compliance with emissions standards set by the U.S. Environmental Protection Agency.

The reasons for suspending operations at Workhorse are unclear. Neither Navistar nor the analysts discussed that segment of the business.

In an email, Schrier wrote, “Navistar has decided to suspend its Workhorse Custom Chassis business which means we will no longer be producing chassis for step vans and any other vehicle beyond our current orders at this time.”

How much the EPA compliance issues are impacting the motorized RV chassis operation is also unclear. Schrier said the troubled engines would have been used in the larger motorhomes.

Monaco is in the final stages of transitioning all motorize production from Coburg, Ore., to its Wakarusa facility. To date, the RV maker has about 550 workers at the Indiana plant.

“We remain committed to the RV industry,” Schrier said. “We think there are opportunities to leverage synergies between Monaco and Navistar.”

For 2012, Monaco anticipates the RV market will continue to improve, charting an uptick in the 4 to 5 percent range for most segments, Schrier said. That outlook is slightly more conservative than a forecast recently released by the Recreation Vehicle Industry Association which is predicting growth of 6.9 percent in 2012 and 3.8 percent in 2013.

In addition to towables and motorhomes, Navistar’s Wakaursa plant continues to produce the all-electric delivery truck, the eStar. The trucks are built only on a per order basis and workers are shifted between the RV and eStar operations.

Navistar is not getting out of the electric vehicle market, Schrier said. The company is a member of the Electrification Leadership Council, a consortium of executives from several top-tier companies, and is working on the second generation of the eStar.

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