Aid package keeps International plant open in Chatham

WARRENVILLE, Ill. (Sept. 5, 2003) — Navistar International said yesterday it would keep its Chatham, Ont., truck plant open after receiving a promise of $65 million from the federal and provincial governments.

Navistar said it will spend $270 million over the next 10 years in technology, training programs, and equipment to modernize the plant, which produces 9000i Series highway tractors and employs 900 workers.

Navistar had planned to close the plant in July after failing to achieve concessions with the Canadian Auto Workers union. In a last-ditch effort to save the plant, CAW members ratified a 3-1/2-year deal in May that includes $47.7 million in savings on labour costs.

It wasn’t enough, Navistar said, to match the $63.1 million it would save each year by producing trucks in Escobedo, Mexico. The company suggested that government assistance bridge the gap.

In an agreement that spans 10 years, Industry Canada and Human Resources Development Canada will contribute $33 million for training programs, research, and development in various projects including modernizing manufacturing techniques, improving energy efficiency, and reducing engine emissions.

The Ontario government will add another $32 million from a special provincial research and development fund.

Canadian Auto Workers president Buzz Hargrove called the announcement a “victory for workers” but hoped it was not about garnering votes in an Oct. 2 provincial election called by Premier Ernie Eves earlier this week.

“We hope that this is not a slick election ploy but a recognition that the truck and auto industries cannot be left to the ‘free market’,” Hargrove said.

At its peak in 1998, the Chatham plant employed almost 2,100 workers and produced 120 vehicles a day. That same year Navistar opened its Escobedo plant, which also builds 9000i trucks. Production workers there earn the equivalent of $4 US per hour, including benefits, compared with $33 US for a worker here.