Navistar International Corp. plans to close its foundry in Indianapolis, eliminating 180 workers, the Lisle, Illinois-based manufacturer announced Monday morning.
The foundry, located on the city’s east side at 5565 Brookville Road, produces engine blocks and heads. Navistar said the closure process will take place during the first half of 2015 and be completed in the summer.
Navistar said it would rely on existing suppliers to pick up the work done at the foundry.
The closure is expected to reduce Navistar’s operating costs by $13 million annually, the company said.
According to a media release, Navistar will take an $11 million charge in the fourth quarter ended Oct. 31 to pay for the upcoming employee-separation benefits, pension and other post-retirement termination benefits, inventory reserves and other related costs.
In addition, the company said it anticipates up to $40 million in additional charges for accelerated depreciation related to the closure.
Navistar is scheduled to report fourth quarter earnings Tuesday. Analysts expect profit of 16 cents per share on revenue of $3 billion, Yahoo reported.
"Over the last two years, we've taken a number of steps to strengthen our business and position the company for a return to profitability and long-term success," Navistar President of Operations Persio Lisboa said in a written statement. "We've determined that leveraging our suppliers for these components will reduce our engine costs, improve our overall manufacturing capacity utilization, and free up additional resources to invest in our core North America truck and parts business."
Navistar stock was up 1.2 percent early Monday morning, to $36.21 per share.
"Closing a facility is a difficult decision because of its impact on the many great people who've been part of our company," Lisboa said. "We will treat people with dignity and respect throughout this process."