CHATHAM, Ont. — Navistar International’s announcement that it may have to slash jobs from its Canadian heavy-duty assembly plant doesn’t mean workers will most likely be sent home, says the truckmaker’s chief spokesman.

Roy Wiley says the company’s alert of potential layoffs in 16 weeks was issued to comply with requirements of the Ontario Employment Standards Act (ESA), which states four months’ advance notice must be given before any job cuts can be implemented.

“The key word is potential,” he told TodaysTrucking.com this morning. “There may be no layoffs at all. Everybody’s anticipating a slowdown next year because of the pre-buy this year, so we’re providing the advance notification as required.

“I’ve personally been involved in two of these advance notifications, and I can say in one case nothing ended up happening. Market conditions changed.”

Both Navistar and the CAW think the new ProStar could give
the truckmaker a competitive edge in a downturn

The company didn’t disclose the number of layoffs being discussed, but a source told TodaysTrucking.com that over 800 jobs are part of the ESA notice.

Chatham plant chair Mike Neuts agrees workers shouldn’t assume the worst at this point, but did admit he was slightly shocked when told of the possible layoff numbers being suggested.

“To satisfy the ESA for a 16-week notice they had to put out a number of 499 or more. I thought that would be the max with a few skilled trades (jobs) in there as well, but the 859 number that came out yesterday was considerably higher than what I was expecting. It was a shocker that kind of stressed me,” he said.

“But again it’s precautionary at the grand end of the scale. At the end of the day we can only wait and see how it’ll pan out.”

If layoffs occur, the company says it would be the result of an anticipated market decline in 2007 because customers pre-bought trucks to avoid purchasing stricter, emission-controlled engines that go into effect in January.

The engines can add between $7,000 and $10,000 to the price of a new truck. There is also an expected 1 to 3 percent fuel economy hit when using the ultra low sulfur diesel fuel (ULSD) required for the new engines.

The Chatham plant is the primary source for International’s 9000 series heavy trucks. The current production schedule at the plant is 200 units per day, up from 162 units per day in January 2006.

Wiley suggests the truckmaker may have a slight advantage in this downturn cycle over its major competitors as it gears up production of the ProStar, the company’s much anticipated new flagship highway tractor.

“It’ll give us an edge regardless of overall market conditions,” says Wiley. “How much? I don’t know. But it should help.”

One reason the company was able to reach a labor contract agreement with the Canadian Auto Workers union in 2004 was because it agreed to build the new model at the Ontario facility.

Until that deal was ratified, the company suggested the truck might have been built at its Escobedo, Mexico plant.

Bob Chernecki, assistant to CAW national president Buzz Hargrove, says he’s been made aware the layoff notice is just a legal prerequisite — for now.

‘If layoffs do occur, it’s something we have to deal with,” he said in an interview. “The current agreement has provisions that deal with these matters and whatever the provisions state we’ll make sure the workers receive it.”

Wiley said any layoff, if it happens, should be temporary, as the industry is expecting another massive prebuy and sales spike in the latter half of 2008 and 2009 in advance of the toughest round of engine emission rules slated for 2010.

“The long term outlook is still good,” he says.