Navistar to boost engine production with investments in Indianapolis, Alabama

HUNTSVILLE, Ala. (April 27) — Navistar International Corp. plans to expand production at its Indianapolis engine plant and invest $250 million to buy and renovate an Alabama factory, moves that should give the company much-needed production capacity and align its facilities along specific product lines.

“This focused facility strategy is an extension of our partnership with our customers,” said Dan Ustian, Navistar group vice president and general manager of the engine and foundry division. “It will facilitate the transition from the current product to the next generation diesel engine and strengthens our diesel technology leadership position for the International brand and our OEM customers.”

The Indianapolis plant will build low-emissions diesel engines for Ford Motor Co., including V-8 engines for Ford’s F-150 pickup, the best-selling vehicle in the U.S. Navistar also recently won a contract to develop and supply V-6 diesel engines for Ford’s sport-utility vehicles.

With daily production having increased from an original capacity of 500 per day to the current 1300 per day, the Indianapolis plant is the highest-volume single producer of mid-range diesel engines in the industry.

From 1995 through the end of this year, Navistar will have invested more than $280 million in the factory, and by 2005 will have invested $500 million.

The plant in Huntsville formerly belonged to the Onan subsidiary of Cummins Engine Co. Onan built small diesel engines and generators there until 1997, when it abandoned the plant because it was inefficient.

Ustian said the plant will be refitted to build engines for Navistar’s International trucks and other brand-name vehicles. The investment is contingent on ratification of incentives offered by and through the state government. The plant would employ 500 to 600 workers initially.

The new investment in Indianapolis and Huntsville facility result from demand to produce next-generation Green Diesel Technology engines for OEM customers, as well as increased demand for engines for Navistar’s International brand of trucks and buses, Ustian said.

A third engine facility in Melrose Park, Ill., produces premium International engines for medium and severe service trucks and buses.