Navistar Indianapolis Employees Ratify New Labor Agreement
29 August 1997
Navistar Indianapolis Employees Ratify New Labor Agreement
Re-Vote on Local Issues Will Make Foundry Cost-Competitive, Preserve Jobs;
Foundry Will Remain Open; No Charge to Fourth Quarter Earnings Will Be
Incurred
CHICAGO, Aug. 29 -- Indianapolis-based employees of Navistar
International Corporation represented by the United Auto Workers
(UAW) today ratified an agreement that will enable the Indianapolis Casting
Corporation (ICC) to remain in operation and be cost competitive.
The local vote follows last week's ratification of a master contract
extension by UAW members company-wide, as well as a successful vote on local
issues by employees of Navistar's Springfield, Ohio operations.
The Indianapolis proposal was the only element of the overall agreement
that was not ratified in the August 17 vote. Local union leadership called
for a re-vote on the proposal, which was held today.
"All along, we felt we had reached a fair and equitable agreement with the
UAW leadership to keep the foundry viable and preserve jobs," said John R.
Horne, chairman, president and chief executive officer. "At the same time,
this is a very innovative and highly detailed proposal, and employees told us
they needed more time to truly understand it.
"We are delighted with the final outcome. Already world-class in terms of
quality and productivity, the foundry will now be cost competitive in the face
of future competition. And with this vote, we now have a mandate from all of
Navistar's UAW-represented employees to make the important changes necessary
to both strengthen Navistar's competitiveness and provide secure jobs for our
employees," Horne said.
The Indianapolis agreement, which extends through October 1, 2002, will
essentially preserve compensation levels for current employees. New hires
will receive a wage and benefit package that is more competitive with the
industry overall.
The agreement includes provisions for transitioning current employees to
the adjacent engine assembly facility in Indianapolis; allowing retirement-
eligible workers to retire and then be re-hired with a new wage and benefit
package, while collecting pension payments; and a new, more competitive wage
and benefit structure for new hires.
With wage levels 50 percent higher than other U.S. foundries, ICC could no
longer stay competitive without a new labor agreement, particularly given
future competition and expanding capacity from foundries in Latin America.
Following the August 17 vote, when employees rejected the proposal that
would make the foundry cost competitive, Navistar had announced plans to close
ICC. With today's ratification, the company can keep the foundry in operation
and no longer intends to take the charge against fourth-quarter earnings that
closing ICC would have required.
Currently employing 650 people, ICC manufactures grey-iron castings for
engines, which it supplies both internally to Navistar and to external
customers.
Navistar International Corporation, with world headquarters in Chicago, is
the leading North American producer of heavy and medium trucks and school
buses. Navistar maintained its position as the sales leader in the combined
United States and Canadian retail markets for medium and heavy trucks and
school buses through the first three quarters of the year, achieving a
27.1 percent share that is consistent with the same period a year ago. The
company also is the worldwide leader in the manufacture of mid-range diesel
engines which are produced in a range of 160 to 300 horsepower.
Navistar/UAW Labor Agreement Fact Sheet
The following represents a summary of the labor agreement negotiated
between Navistar International Corporation and the United Auto Workers (UAW).
Key Benefits
-- This is a "win-win" contract for Navistar, its employees and the UAW.
-- Employees will continue to enjoy excellent wages and benefits, and the
maximum number of jobs will not only be preserved, but also made more
stable by a more competitive Navistar.
-- Navistar's Indianapolis Casting Corporation (ICC) foundry will remain
open and become cost-competitive.
Indianapolis Casting Corporation
Four Options for Current ICC Employees
1. Those eligible can retire, in which case they would receive pension
payments and associated benefits, and would be eligible to be hired
back for wages only, earning an average of $15.58/hour for non-skilled
workers.
2. Those eligible for retirement in the next two to three years will
continue to receive the current wages and benefits until retirement and
then can retire, in which case they would receive pension payments and
associated benefits, and would be eligible to be hired back, earning
the above wages.
3. Other employees will be eligible to move to the Indianapolis engine
plant as jobs become available to meet expected increased demand.
4. Employees who choose to remain in the Foundry will receive the new
competitive benefits and base wage rates.
Union Representation
-- The UAW will continue to represent ICC employees.
-- New hires at ICC -- and retirees who are hired back -- will be covered
under an ICC-specific agreement.
SOURCE Navistar International Corporation