CHATHAM, Ont., (May 16, 2005) — A multi-million dollar deal that saved International Truck and Engine’s Chatham, Ont. heavy-duty assembly plant two years ago is being officially ratified today.

In 2003 — amid fears the plant would shut down and move production to Escobedo, Mexico — the federal and then-Tory Ontario governments agreed on a $65 million lifeline to Navistar International in order to keep the plant in Canada. With that cash, Navistar said it would spend a total of $270 million over the next 10 years in research and development, technology, training programs, and equipment to modernize the plant, which produces 9000i Series highway tractors and employs 900 workers.

The McGuinty government has picked up on the 2003 promise, contributing up to $32 million, while the feds will fork over $33 million.

The money will be used to train highly skilled workers and establish a new research and development centre for advanced manufacturing, Minister of Economic Development and Trade Joseph Cordiano announced in Chatham today.

The centre is being established by International in partnership with the University of Windsor. It will prototype and test leading-edge technologies used to manufacture the current and next generation of heavy trucks. The company will also undertake specific R&D projects related to the reduction of diesel emissions.

“This industry is key to our critical business links south of the border and key to keeping our economy across the continent flowing and vibrant,” said Cordiano. “Truck manufacturing is no longer a traditional industry. The type of vehicles made here in Chatham use new environmental, safety and security
technologies that are necessary to keep goods moving to our major markets.”

The Chatham plant has recovered nicely since a heated strike by CAW workers in 2002, which resulted in plant closures and threats from the company to close the facility and shift production to Escobedo. In a last-ditch effort to save the plant, workers ratified a 3.5-year deal in May 2003 that included $47.7 million in savings on labour costs. It wasn’t enough, said Navistar, and only agreed to keep the plant when both the federal and provincial governments kicked-in the $65 million in aid.

Last year, Navistar announced a $300 million program to build a new line-haul class-8 model in Chatham, starting in 2007. Until then, it was not known whether the future truck would be produced in Chatham, the U.S. or the company’s Escobedo plant.