The third largest US truck maker, Navistar International, said on Tuesday it still expects to be profitable this year as it sees a nascent recovery in US truck industry demand, Reuters reported.
“We do have the beginning of a turnaround, I believe,” Robert Lannert, Navistar’s vice chairman and chief financial officer, said, according to the news agency.
Demand for trucks in the United States collapsed two years ago, crushed by the economic slowdown and an oversupply of vehicles, Reuters noted.
According to the report, Lannert stressed that signs of an industry-wide rebound in truck orders are tentative. Demand for heavy-duty trucks improved in May, but orders for medium-duty trucks continue to lag, he reportedly said.
Reuters said Lannert spoke to analysts who were touring the company’s production facilities in Escobedo, Mexico.
The news agency said Warrenville, Illinois-based Navistar, which has posted a string of losses over the past two years, has responded by cutting costs and jobs, closing some factories and retooling others to reduce excess capacity.
The company planned to close its Chatham, Ontario, heavy truck plant on July 18 and shift production to Escobedo, but a last-ditch effort by the Canadian Auto Workers to save the plant has temporarily averted the closure, the report added.
The CAW’s plan hinges on receiving financial aid from the federal or Ontario government in Canada. The CAW has pegged the amount of aid at C$10 million annually. Talks between the company and the governments are continuing, Reuters said.
“Those negotiations are constructive, and they are moving along,” Lannert reportedly said.
According to Reuters, the CFO told analysts the company remains hopeful of returning to modest profitability in 2003.
But Wall Street has been sceptical, Reuters noted, adding that analysts on average have been expecting Navistar to post a loss of 24 cents a share for 2003, with estimates ranging from break-even to a loss of 70 cents a share.