NEW ALBANY, Ohio — Commercial Vehicle Group Inc. (CVG) has announced the planned closing of its Norwalk, Ohio, truck cab assembly facility. This action comes as a result of Navistar’s decision to in-source the cab assembly operations performed at Norwalk into its existing assembly facility in Escobedo, Mexico. The closure of the Norwalk location will impact approximately 120 hourly and salaried associates at the facility. Norwalk is expected to continue assembly operations for Navistar products through April 2010.
Persio Lisboa, vice president and chief procurement officer of Navistar, said, "Based on the decision to manufacture the cab, Navistar has decided not to renew its existing contract with CVG for cab assembly. This decision allows Navistar to leverage our core competency as a world-class assembler to further optimize cost, quality, delivery and warranty while also strengthening the alignment of our supply base to our manufacturing footprint. We know this is a difficult outcome for CVG, as they have been a valued supplier since 2002. Navistar intends to work closely with CVG throughout this transition period while looking at additional business opportunities going forward," concluded Lisboa.
"We are deeply disappointed in Navistar’s decision to in-source cab assembly, and we sincerely regret the impact that this decision will have on our dedicated employees at the Norwalk facility. We have enjoyed a long partnership in the development, launch and building of Navistar cabs," said Mervin Dunn, president and chief executive officer of Commercial Vehicle Group. "While we regret that we will not continue to assemble cab products for Navistar, we understand their desire to utilize their own existing capacity, and we will continue to work closely with them to supply stamped components, interior products and seating products as we move forward in our ongoing relationship with Navistar," added Dunn.
In 2007, CVG launched stampings and cab assembly operations for Navistar’s advanced Prostar platform for which CVG was awarded Navistar’s Diamond Supplier Award, its highest-level recognition for overall performance by a major supplier.
"We are committed to ensuring that we neutralize the bottom-line impact to CVG. We intend to do this through additional business awards as well as additional cost-cutting measures at CVG," added Dunn.
The company estimates this decision will negatively impact CVG’s 2010 revenues by approximately $10 million to $15 million and approximately $30 million to $35 million on an annualized basis. Excluding any one-time costs associated with the closure, the company does not expect the decision to impact its operating profit.
Commercial Vehicle Group is a leading supplier of fully integrated system solutions for the global commercial vehicle market, including the heavy-duty truck market, the construction and agriculture market and the specialty and military transportation markets. The company’s products include suspension seat systems, interior trim systems, such as instrument and door panels, headliners, cabinetry, molded products and floor systems, cab structures and components, mirrors, wiper systems, electronic wiring harness assemblies and controls and switches specifically designed for applications in commercial vehicle cabs.
