CAW Initiates Strike Against Navistar's Canadian Operation; Heavy Truck Production Shifted to Mexico

WARRENVILLE, Ill., June 1 The Canadian Auto Workers (CAW) union today initiated a strike against International Truck and Engine Corporation after negotiators for the company and the union were unsuccessful in reaching agreement on a new labor contract before the contract expired at 12:01 EDT June 1.

The action by the CAW's Local 127 affects approximately 800 CAW-represented production and maintenance employees at the company's Chatham, Ontario heavy truck assembly plant. International Truck and Engine is the operating company of Navistar International Corporation .

Despite the strike action by the CAW, the company said it expects negotiations will resume in an on-going effort to achieve agreement on a new labor contract. To accommodate current orders and to continue to serve its customers and dealers, the company is increasing premium conventional heavy truck production at its assembly plant in Escobedo, N.L. Mexico. The state-of-the-art Mexican plant currently builds premium conventional heavy trucks for customers in the Southwest United States and has the capacity to increase production.

Negotiations towards a new labor agreement began on April 26. On April 5, a "consideration to close" letter was issued to the CAW. That letter, required under the contract that expired June 1, said that cost reductions totaling $28 million were needed to make the plant competitive and that the company had been able to identify half the amount.

Prior to the strike, production at Chatham had been averaging 39 trucks per day on one shift and the daily production level at Escobedo will be increased to match the Chatham output.

In addition to heavy trucks, International Truck and Engine is a leading producer of mid-range diesel engines, medium trucks, severe service vehicles, and a provider of parts and service sold under the International® brand. IC Corporation, a wholly owned subsidiary, produces school buses. The company also is a private label designer and manufacturer of diesel engines for the pickup truck, van and SUV markets.