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Stalled labour talks close Ontario factory

Published by Steve Coleman on August 03, 2011

Two years of stalled talks between Navistar International Corporation and the Canadian Auto Workers has permanently closed the company's Chatham, Ont. plant.

Navistar announced Aug. 2 that Chatham will shut its doors for good after employees were given layoff notices two years ago. Because of the duration of the labour dispute, Chatham's production has been absorbed by other Navistar plants.

As a part of the announcement, the company is also planning to scale back operations at its recreational vehicle plant in Coburg, Ore., affecting 450 people. All "motor coach" production will be consolidated at Wakarusa, Ind. Facilities creating 400 new jobs, while some headquarters jobs will move to the company's new head office in Lisle, Ill..

"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, Navistar Truck Group said in a 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."

The company's Workhorse Custom Chassis subsidiary plans to close its Union City, Ind., chassis plant, impacting about 225 employees. These operations will be consolidated into other existing Navistar facilities.

Closing the Chatham plan is expected to cost the company $100 million to $130 million. Most of it is related to pension and retiree healthcare costs.

The Monaco/Workhorse consolidation may cost the company $100 million.

The company expects ongoing savings of $20 million to $30 million annually once all of the changes are put in place.

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