Future of Chatham plant in government hands

CHATHAM, Ont. (May 15, 2003) — Navistar International and the Canadian Auto Workers union both say it’s now up to the Canadian government to decide whether the Navistar International truck-assembly plant in Chatham, Ont., will remain open or shut its doors on the scheduled July 18 deadline.

Navistar announced last year it would close the plant after failing to agree on concessions with the union, which the company said were essential to make the plant viable in the long-term.

The likelihood the plant would stay open increased dramatically yesterday, when CAW members overwhelmingly voted to ratify a 3-1/2-year deal that includes $47.7 million in concessions. While Bob Chernecki, assistant to the CAW president Buzz Hargrove, told Today’s Trucking earlier in the week that wages, benefits, and pensions would not be cut, the union did agree in the end to a temporary freeze to cost of living allowance, and to cut vacations and bonuses, among other concessions.

The two parties are now waiting for municipal, provincial and the federal government to approve $15.4 million a year in aid before the agreement can be finalized. Navistar says it can save $63.1 million per year by shifting production of its 9000i Series tractors from its Chatham plant to a factory in Escobedo, Mexico, and would therefore need the government assistance to bridge the cost reduction gap.

According to a letter Navistar sent to Canadian officials, one of several ideas proposed would involve Navistar selling the plant to the government and then leasing it back.

Chernecki said that CAW president Buzz Hargrove has been meeting with officials from all three levels of government this week, and that so far, reaction has been generally positive. Navistar spokesman Roy Wiley added he’s optimistic the plan would be completed.

In addition to its 900 active workers, the Chatham plant has about 1,300 union employees on layoff status.

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