We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Here's What Navistar is Doing to Combat Coronavirus Crisis
Read MoreHide Full Article
Navistar International Corporation recently announced the implementation of a number of actions to boost the firm’s cash position in a bid to sail through the coronavirus crisis.
The company has slashed its capital spending for 2020 by 30% as well as postponed 30% of the information-technology project spend to minimize costs during this period of reduced business. It has also deferred employer payroll tax payments, certain employee retention tax credits and $162 million in pension contributions until 2021 under provisions of the CARES Act.
Compensation reductions include 35% salary cuts for the CEO and board of directors, and 10-30% pay cut for U.S.-based, salaried exempt, non-represented employees. Navistar also announced a 20% reduction in workweek for its contract workers, which is in addition to the deferral of merit salary increases and a delay in 401k company match contributions until 2021. Salary deferrals, effective Apr 20 through Dec 31, will be repaid with interest by Mar 15, 2021. Other steps to minimize costs shall take place immediately through Dec 31, 2020.
These cost-reduction initiatives are expected to preserve about $300 million in cash, which will be used to deal with the losses caused by the production shutdowns. As of Apr 10, the company stated it had $1 billion in both consolidated cash and cash equivalents, and manufacturing cash and cash equivalents.
Meanwhile, Navistar service facilities and parts distribution centers continue to operate in order to meet the changing customer needs amid coronavirus pandemic. However, the production suspension at the company’s truck assembly plant in Springfield, OH has been extended through early May, in response to the disruptions in Navistar’s supply chain due to the current crisis. Moreover, the company withdrew its financial and industry guidance for 2020 last month.
The coronavirus pandemic has become a concern for other global auto biggies as well, including Tesla (TSLA - Free Report) , Honda Motor (HMC - Free Report) , Toyota Motor (TM - Free Report) , Volkswagen AG, Goodyear Tire, Nissan, Harley-Davidson and Hyundai Motor. Several automakers have closed their factories and suspended production, while the others plan to change manufacturing processes and cut production levels in their plants, in line with the nationwide campaign addressing the crisis. The pandemic has not only dented consumer sentiment and thwarted vehicle demand but also distorted the supply-chain balance globally.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
Here's What Navistar is Doing to Combat Coronavirus Crisis
Navistar International Corporation recently announced the implementation of a number of actions to boost the firm’s cash position in a bid to sail through the coronavirus crisis.
The company has slashed its capital spending for 2020 by 30% as well as postponed 30% of the information-technology project spend to minimize costs during this period of reduced business. It has also deferred employer payroll tax payments, certain employee retention tax credits and $162 million in pension contributions until 2021 under provisions of the CARES Act.
Compensation reductions include 35% salary cuts for the CEO and board of directors, and 10-30% pay cut for U.S.-based, salaried exempt, non-represented employees. Navistar also announced a 20% reduction in workweek for its contract workers, which is in addition to the deferral of merit salary increases and a delay in 401k company match contributions until 2021. Salary deferrals, effective Apr 20 through Dec 31, will be repaid with interest by Mar 15, 2021. Other steps to minimize costs shall take place immediately through Dec 31, 2020.
These cost-reduction initiatives are expected to preserve about $300 million in cash, which will be used to deal with the losses caused by the production shutdowns. As of Apr 10, the company stated it had $1 billion in both consolidated cash and cash equivalents, and manufacturing cash and cash equivalents.
Meanwhile, Navistar service facilities and parts distribution centers continue to operate in order to meet the changing customer needs amid coronavirus pandemic. However, the production suspension at the company’s truck assembly plant in Springfield, OH has been extended through early May, in response to the disruptions in Navistar’s supply chain due to the current crisis. Moreover, the company withdrew its financial and industry guidance for 2020 last month.
Navistar currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
The coronavirus pandemic has become a concern for other global auto biggies as well, including Tesla (TSLA - Free Report) , Honda Motor (HMC - Free Report) , Toyota Motor (TM - Free Report) , Volkswagen AG, Goodyear Tire, Nissan, Harley-Davidson and Hyundai Motor. Several automakers have closed their factories and suspended production, while the others plan to change manufacturing processes and cut production levels in their plants, in line with the nationwide campaign addressing the crisis. The pandemic has not only dented consumer sentiment and thwarted vehicle demand but also distorted the supply-chain balance globally.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>