BARTON — Navistar International Corp.’s plans to produce its International LoadStar work truck in Colbert County appear stalled while the company deals with issues concerning the truck’s engine.
It comes at a time when the company’s stock has dropped to less than half of what it was in February and rumors are circulating that question the company’s future at Barton.
The Environmental Protection Agency did not approve a type of engine technology developed by Navistar because of problems with emissions. That caused Navistar to back off from that engine technology, and the company has been working with Cummins Inc. to improve technology on its heavy-duty trucks.
Karen Denning, director of communication for Navistar’s truck division, said fabrication operations are going on at the plant, which has more than 150 full-time workers. Navistar announced plans to take over operations at the plant in September.
“Navistar never comments on rumors or speculation,” Denning said. “We have fabrications operations that are happening every day.
“Right now, the company’s focus is on returning to profitability and putting any capital expenditures on hold. It would be speculation to say anything beyond that right now.”
Denning wouldn’t comment on how long it would take until truck production gets under way.
“Any immediate time window that requires capital investment is put on hold right now because our resources need to be directed toward delivering positive financial results.”
The company’s stock has plummeted in recent months to less than half of what it was earlier this year. The stock was sold at $47.42 cents on Feb. 6, but closed Thursday at $23.13.
Navistar recently received good news when J.P. Morgan and other investors agreed to provide the company with a $1 billion line of credit.
The Retirement Systems of Alabama is providing financing for Navistar’s operation at Barton. David Bronner, chief executive officer at RSA, said Navistar is current in its payments to RSA.
Bronner said the problem has been with the new engine technology Navistar is trying to get approved. He said without legal approval, the company apparently is going with old, accepted technology, which has delayed the operation at the company’s Barton operation.
“It’s my understanding that the time frame has been pushed out,” Bronner said.
He said he has no reason to believe the project has been placed on hold indefinitely.
In March, Navistar announced it would build its International LoadStar truck at Barton. In June, company officials announced the truck’s body also would be built at the plant, meaning everything but the engine would be built at Barton. The engine would be manufactured at its Huntsville plant.
When Navistar announced it planned to operate at the nearly mile-long Barton plant, company officials said the plant would take a central role in the company’s future. Denning didn’t comment on whether the company plans to continue in that direction.
“Right now we are very focused on the near term in returning the company to profitability,” she said.
The Barton facility was constructed after the July 2007 announcement that the National Alabama railcar plant would operate there and bring at least 1,600 jobs. A weak economy and other problems thwarted those plans, causing RSA, which invested more than $600 million in the project, to take over ownership of the plant.
The Shoals Industrial Development Committee unanimously agreed Sept. 26 to transfer the incentives committed to National Alabama to Navistar. The action allowed Navistar to qualify for up to $23 million in incentives if the company meets specified employment thresholds. The company has about three years remaining to meet those thresholds.
Navistar must reach and maintain 900 workers before qualifying for any incentive money, which would be $7.67 million at that level, according to Shoals Economic Development Authority officials who were involved in the project.
The company will have until Dec. 31, 2015, to reach 1,800 workers to qualify for the full incentive package.
Company officials never confirmed the amount of workers who would be at the plant, but Gov. Robert Bentley said in September it would have 1,800 workers. Officials said the plant could produce as many as 2,200 jobs when spin-off jobs are taken into account.
Bernie Delinski can be reached at 256-740-5739 or bernie.delinski@TimesDaily.com.