Navistar International Corp. will close its plant in Garland, Texas, due to falling demand for commercial trucks.
The facility located near Dallas has about 900 employees and was the company’s primary plant to assemble heavy-duty trucks over the past years. The company plans to close the plant in the first half of 2013, hoping that this move will lower its costs and increase the utilization of other plants.
“Navistar has too much manufacturing capacity in North America and we must take quick action to improve our business and position the company for long-term success,” said Troy Clarke, president and chief operating officer.
Navistar’s rivals have also begun to reduce production as demand for heavy-duty trucks in North America has been steadily fallen since the beginning of 2012. Analysts predict that truck sales will remain sluggish in 2013 too. Workers from Navistar’s plant will be transferred to other plants owned by the company, which translates in increased work at the facilities in Mexico, Escobedo, and Springfield, Ohio.
Closing the Garland site, which has been manufacturing trucks for 15 years, represents the company’s biggest move to reduce costs. Navistar estimates that closing the plant will cut costs by $25 million to $35 million.