Navistar will build electric trucks at new plant in Texas

TruckElectric

Well-known member
First Name
Bryan
Joined
Jun 16, 2020
Threads
769
Messages
2,482
Reaction score
3,273
Location
Texas
Vehicles
Dodge Ram diesel
Occupation
Retired
Country flag
Navistar International Corp. (NYSE:NAV) will build electric trucks on the same assembly line as diesel models at a new plant in San Antonio beginning in the spring of 2022.

“San Antonio will be capable of building both fuel and fully electric trucks with the same robust manufacturing process with no off-line assembly,” Persio Lisboa said on the company’s fiscal third-quarter earnings call Wednesday.

The electric truck announcement came against a backdrop of third-quarter losses due to several underperforming business segments impacted by the coronavirus pandemic. Navistar showed an electric version of its medium-duty MV Series at the North America Commercial Vehicle show in October 2019.

Key segments hit hard by pandemic
School buses sold under the IC brand were hit hard as districts decided when or whether to start in-person fall classes or continue teaching remotely.

Class 8 registrations across the industry year to date are down 30%. Trucks purchased for rental and leasing — a big part of Navistar’s Class 8 business — are down 55%. Other segments combined are down 20%.

Sales of trucks dedicated to rental began falling in late 2019 as customers converted the underused trucks to fill leases. They did not order replacements, a process called de-fleeting.

“One of the early indications we’re seeing is that the rental business is coming back,” Lisboa said.

Navistar lost 27 production days to the pandemic between May and July, half as many as during the fiscal second quarter, Chief Financial Officer Walter Borst said.

“We still see a clear divide in the trucking industry,” Lisboa said. “Carriers with dedicated routes hauling dry and refrigerated goods, as well as flatbed, have seen increased runs. However, what continues to be depressed is the rest of the general freight and trucking segments.”

By the numbers
Navistar reported a third-quarter net loss of $37 million, or 37 cents per diluted share, compared to third-quarter 2019 peak-cycle net income of $156 million, or $1.56 per diluted share.

Revenue in the May-July period was down 45% from third-quarter 2019 to $1.7 billion. Deliveries of Class 6-8 trucks and buses in the United States and Canada were down 53%.

Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) in third-quarter 2020 was $104 million versus $266 million a year ago. Adjusted net income for the quarter was a loss of $8 million compared to income of $147 million in the third quarter last year.

Navistar ended the quarter with $1.6 billion in manufacturing cash, including $600 million raised in April through the sale of senior secured notes.

Without additional disruption, Borst projected industry sales for 2020 in the range of 305,000 to 325,000. Class 8 trucks would account for 200,000 to 215,000 of that. Class 6-7 trucks and school buses would range between 105,000 and 110,000 units.

Looking for sustainable cost savings

Navistar is seeking 7-9% savings in sales, general and administrative expenses (SG&A) as temporary cost-savings measures like employee salary cuts expire. The truck maker is looking at shedding some facilities because many employees are working from home. It is also stepping up outsourcing, looking at speeding decision-making by reducing management layers.

“We’re not done,” said Lisboa, who consolidated the roles of his top leaders after succeeding Troy Clarke as president and CEO on July 1. “We’re transitioning from temporary cash-conservation actions to sustainable cost-savings actions while maintaining total focus on the priorities of Navistar 4.0.”

Building blocks coming together

The transformational Navistar 4.0 program includes a modular platform for building future trucks with fewer parts and fewer suppliers; the manufacturing 4.0 plant in Texas and strategic partnerships like one with startup autonomous truck software developer TuSimple.
Navistar said July 15 it plans to have a highly autonomous Level 4 truck for sale in 2024, years sooner than competitors.

Financially, Navistar 4.0 calls for a 12% EBITDA margin by 2024, up from the current 8% margin. The company also is targeting a 25% market share in its core segments.
“We see all the building blocks of Navistar 4.0 coming together in the right place,” Lisboa said. “There is a launch that we are going to see in the next 24 months that will have better cost, and once the [San Antonio] plant launches, will have a much lower conversion cost. Those things support our goal to increase our adjusted EBITDA.”

Executives on the call declined to address the status of a $2.9 billion unsolicited takeover offer by TRATON Group, the heavy-duty truck holding company of German automaker Volkswagen AG.


Source: Freight Waves
Sponsored

 

Cyberman

Well-known member
First Name
Adam
Joined
Apr 7, 2020
Threads
35
Messages
2,278
Reaction score
3,651
Location
San Diego
Vehicles
F150,F550, Escape
Occupation
Cybercontractor
Country flag
I've owned two International trucks. Both were by far the biggest piles of crap I've ever owned. Navistar, just...stop.
 

rr6013

Well-known member
First Name
Rex
Joined
Apr 22, 2020
Threads
54
Messages
1,680
Reaction score
1,620
Location
Coronado Bay Panama
Website
shorttakes.substack.com
Vehicles
1997 Tahoe 2 door 4x4
Occupation
Retired software developer and heavy commercial design builder
Country flag
Irregular route carriers are split away from regular route carriers’ increased haul during pandemic. That trend is driven by independent contractor trucking. EV’s address regular route, scale economics in fleets and multi-modal operations where freight switches from sea to rail to truck.

Irregular route will be the last stand for ICE and independent trucking companies. Gov’t would have to buy-back ICE trucks to replace independent trucking with EV’s. That will happen to save an industry from complete loss of the service independent contractor’s provide that fleet carriers cannot. Sectors like heavy haul, roadrunner and sleeper teams just to name a few that are problematic at-scale for regular route carriers.

Navistar (i.e. International Harvester) fills a category of truck that can best be described as “affordable”. Like it or not, it is servicable transport for what it is. No argument that it is not top of the line. Navistar does not aim to be. There is a whole segment of the economy that cannot afford nor use more expensive transport AND be competitive. Navistar is for them. Navistar have had decent motors. That’s the brand MVP. It needs to rebrand or replace ICE with an EV equally effective. That’s what will be its second whammy after ICE are banned.

Traton Gp. takeover is interesting but I would venture not in a longterm way. It looks very attractive to sell off Navistar assets, retire the brand and VW acquire the production the more stock price declines.
 

Cyberman

Well-known member
First Name
Adam
Joined
Apr 7, 2020
Threads
35
Messages
2,278
Reaction score
3,651
Location
San Diego
Vehicles
F150,F550, Escape
Occupation
Cybercontractor
Country flag
Basic transpo around town, just like a car. First was a Scout II, next was a 4-door flatbed. Awful suspension, bad motor, the only thing that worked on the dashboard was the gas gauge. Never, ever, ever again!
Sponsored

 
 




Top