International Truck and Engine Corporation will close its Chatham, Ontario assembly plant in Canada early next summer, a decision that Canadian Auto Workers (CAW) union president Basil ‘Buzz’ Hargrove immediately branded as “callous”.
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The company said that the heavy truck plant closure was a necessary step to address competitive market conditions.
“This has been a very difficult decision, but this decision in no way reflects on the performance of our Chatham employees and the quality trucks they build,” said International’s truck group president Steve Keate.
“Obviously, this decision was made only after exploring every available option to achieve the competitive cost structure needed given industry demand.”
In July, the company agreed a two-year contract with the CAW, which said the company would not close the plant before June 1, 2003. The Chatham plant is currently operating on one shift with approximately 1,000 employees. In addition to active workers, there are approximately 1,200 union workers on layoff status.
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By GlobalData
“This is another callous decision made without regard or respect for long service workers, their families and their communities and it is a slap in the face to the sovereignty of Canada,” the CAW’s Hargrove said.
“We have another case of Americans making decision in the best interest of Americans and to hell with Canada.”
International said the exact timing for the closing of the plant would be announced at a later date.
Production of 9000i Series Class 8 trucks would be transferred to the company’s Escobedo, Mexico assembly plant. That plant, opened in 1998, features the latest assembly technology.
A furious Hargrove said that Canada now had no government automotive policy to govern trade in the important automotive industry for the first time since the 1930s.
“Under Canada’s auto pact, that was destroyed by the WTO decision of February 19, 2001, Navistar would not have been able to sell in Canada, unless they manufactures trucks in Canada,” he said.
“I am calling on prime minister Jean Chretien and industry minister Allan Rock to immediately intervene and to notify the Navistar board of directors that they will not be able to sell trucks in our market unless this decision to close is reversed.”
Hargrove said Canada had other truck manufacturers such as Paccar in Quebec and Freightliner in St. Thomas, Ontario who were committed to investment and jobs in Canada, not just in selling in the market.
“Canada can turn over the total market to Paccar and Freightliner, if Navistar won’t keep the plant open,” Hargrove added.
International said the cash impact of the closing of the Chatham plant had been included in the company’s 2003 financing plan to the end of 2005. The financial impact of the closing would be included in the company’s fourth quarter restructuring charge that would be made public no later than December 3.
Chief financial officer Robert Lannert said that the 2003 plan presented at its board meeting on October 15 showed the company returning to modest profitability in 2003 at industry retail sales approximately 8,500 units greater than 2002.
