Navistar Jumps on Report Its Considering Job Reductions
Navistar International Corp. (NAV) rose the most in five weeks after Crain’s Chicago Business reported that the maker of International trucks has told employees it’s considering options for the business including job cuts.
The shares gained 10 percent to $24.62 at the close in New York, the biggest daily increase since June 29. The Lisle, Illinois-based company’s stock has fallen 35 percent this year.
Navistar told employees last week that voluntary departures and involuntary job cuts are among options it’s considering as it looks to cut expenses, Crain’s said, citing Karen Denning, a spokeswoman. The company has offered a voluntary separation program for any salaried full-time employee, according to the report. Navistar has 3,400 such eligible employees in Lisle, Joliet and Melrose Park, Illinois, Crain’s said.
Navistar slid to its lowest price in 3 1/2 years on Aug. 2 after disclosing a U.S. Securities and Exchange Commission inquiry. The company, which has been developing an engine to meet U.S. emission standards after its earlier technology failed to comply, last week also withdrew its yearly forecast until the release of its third-quarter earnings next month.
The company sent a memo to staff members last week announcing that job reductions are an option being considered, Denning said by telephone today.
“That is the last lever,” she said. “The number of people cut is contingent on the success in other areas.”
Navistar has about 19,000 employees, Denning said.
Fitch Ratings today downgraded Navistar’s issuer default ratings to B- from B+, citing “the negative impact of recent developments including already weak operating results in 2012.”
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