Navistar to Shut Ontario Truck Plant; Chassis Works Also to Close

Navistar Inc. said that it will permanently close its heavy-duty truck manufacturing plant in Chatham, Ontario, which has been mothballed for two years because of a labor dispute.

The Chatham plant employed about 1,000 workers before the recession hit in late 2008, making mostly the International ProStar — the company’s main over-the-road tractor (12-15-08, p. 7).

Navistar closed the factory in June 2009 after it failed to reach agreement on a new contract with the Canadian Auto Workers union.

In its Aug. 2 statement, Navistar also said that its Workhorse Custom Chassis subsidiary will close its Union City, Ind., chassis plant, which has 225 workers, and “significantly scale back operations” at its Monaco motor coach manufacturing plant in Coburg, Ore., which employs about 450 people.

“From a capacity standpoint, we are well positioned to meet demand expected in the last half of 2011 and further increases in 2012,” Dee Kapur, president of Navistar Truck Group, said in the statement. “We’re seeing tremendous benefit from our flexible manufacturing strategy, which allows us to build more trucks — and a wider variety of them — at various plants.”

“Navistar . . . now has the capability to produce Class 8 vehicles at multiple North American locations, including Garland, Texas; Springfield, Ohio; and Escobedo, Mexico,” said Navistar spokeswoman Karen Denning. “In fact, there is Class 8 production at all three of those facilities.”

“For competitive reasons, I can’t get specific about production” at each of the plants, Denning added.

However, Navistar’s website says the Escobedo facility can assemble 250 Classes 6-8 vehicles a day, and under terms of the contract that expired in 2009, Navistar had to produce at least 35 vehicles a day at Chatham (1-12-09, p. 3).

Ken Lewenza Sr., president of the Canadian Auto Workers, told Transport Topics that Navistar never negotiated seriously to reopen the plant. “We have had informal meetings, including this year, with Navistar about seeking a way to reopen the Chatham plant,” he said. “We offered various scenarios but Navistar never responded with any offer of its own.”

Navistar spokeswoman Denning said that “both sides worked hard” in “periodic discussions between Navistar and the CAW, but no viable options . . . surfaced.”

Lewenza said Navistar’s last formal offer was its proposal to renew a contract before it expired in June 2009.

“That proposal would have left the plant with only 60 CAW employees and more than 1,000 people laid off,” Lewenza said. Denning confirmed that Navistar’s last written offer was its proposal in 2009 contract negotiations.

Under Canadian law, he said, workers still had rights to pensions and to buyouts for long-time workers who had not qualified yet for a pension.

Lewenza said he would begin meeting with Navistar later in August to negotiate those financial settlements. Denning confirmed that Navistar would meet with the union to negotiate shutdown terms.

CAW issued a statement Aug. 2 saying that Navistar had received Canadian government benefits to upgrade the Chatham plant.

“Over the years, Navistar has benefited from over $60 million in federal and provincial funding, as well as $40 million in contract savings from union members in exchange for job commitments and the long-term viability of the Chatham facility,” the union wrote.

Navistar said the “planned restructuring and asset impairment activities related to the Chatham closure are expected to result in charges of $100 million to $130 million, of which the majority is related to pension and retiree healthcare costs.”

Navistar said the decision to move its headquarters from Warrenville, Ill., played into the decision on Monaco.

“All motor coach production will be consolidated at Monaco’s Wakarusa, Ind., manufacturing facility, and certain Monaco headquarters functions will be consolidated at Navistar’s new corporate campus in Lisle, Ill.,” Navistar said. “The company plans to continue producing towables and retain certain finance and information systems operations in Oregon, as well as maintain a RV service center there.”

The operations performed at the Union City custom chassis facility in Indiana would be “consolidated into other existing Navistar facilities for greater efficiency and productivity,” the company said.