(CHATHAM, ON) – Navistar International, which is in the process of an arbitrated severance payout to its former Chatham workers, has announced a first quarter 2017 net loss of $62 million, or $0.76 per diluted share, compared to a first quarter 2016 net loss of $33 million, or $0.40 per diluted share.
Revenues in the quarter were $1.7 billion, a decline of six per cent compared to $1.8 billion in the first quarter last year.
While the company reports the decrease was primarily reflective of lower truck volumes, due to soft Class 8 heavy industry conditions coupled with lower global sales, it also took a loss from its now closed Chatham truck plant.
During the quarter, Navistar recorded $7 million of restructuring charges related to the 2011 closure of the plant.
The company also announced last week the closing of a wide-ranging strategic alliance with Volkswagen Truck and Bus. The deal included a $256 million equity investment in Navistar by the Volkswagen business unit.
Features of the alliance will include the creation of a procurement joint venture and a strategic technology and supply collaboration, both of which are already up and running.
The company reiterated an expectation that the alliance will be accretive beginning in its first full year of operation. It also expects cumulative synergies, for Navistar, to ramp up to at least $500 million over the first five years.
By the end of the period, the company expects the alliance will generate annual synergies of at least $200 million, and for the annual run rate to grow materially thereafter.
In a September 6, 2016 announcement, Andreas Renschler, CEO of Volkswagen Truck and Bus, talked of his company taking, “… the next step on our way to becoming a ‘Global Champion’ in the commercial vehicles industry.”