International to keep Chatham plant open

International Truck and Engine Corp plans to keep its Chatham, Ontario, heavy-duty truck plant open, thanks to a long-term investment by the company, the Canadian government and the province of Ontario.

The Canadian government will contribute up to $23 million (CDN $33 million) under its Technology Partnerships Canada program and various training programs, and Ontario will contribute up to $22 million (CDN $32 million) as part of its Large Scale Strategic Investment Initiative.

The plant employs about 750 active Canadian Auto Workers (CAW) members and produces an average of 35 trucks a day. At its peak in 1999, the plant produced an average of 120 trucks a day.

Daniel C Ustian, president and chief executive officer of International parent Navistar International Corp, said the decision to keep the plant operating would result in an adjustment to the company's existing restructuring charge recorded in fourth-quarter 2002.

The plant was the target of a six-week strike in July 2002 by members of the CAW. Union workers returned to work after the company agreed not to cease production at the plant for at least one year.

However, in October 2002, International announced it would close the plant and shift production of its 9000i Series Class 8 trucks to the Escobedo, Mexico, assembly plant. This past March, it announced a July 18 shutdown date.

But in May, International and CAW reached an agreement to remain open past its July 18 shutdown date, as both sides agreed on how to cut $31 million in costs from plant operations, which International said was needed to make the facility competitive.

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