Truck and engine builder Navistar International Corp. is closing the book on an idled plant, and it outlined a plan to rationalize its North American RV and chassis operations in line with forecast demand. Navistar produces a variety of commercial and military trucks, buses, and recreational vehicles, along with diesel engines for trucks and pickups, and chassis for RVs and vans.
The group’s Chatham, Ontario, truck plant was idled in June 2009 and about 1,000 employees were laid off after Navistar failed to conclude a labor agreement with the Canadian Auto Workers union. Explaining its decision to close operation permanently now, the company noted that Chatham’s output has already been absorbed by other Navistar truck plants.
“From a capacity standpoint, we are well-positioned to meet demand expected in the last half of 2011 and further increases in 2012,” stated Navistar Truck Group president Dee Kapur. “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.”
Navistar said Chatham closing would result in charges of $100 million to $130 million, mostly due to pension and retiree healthcare costs.
In addition, Navistar will reduce manufacturing operations at a Monaco Coach RV plant in Coburg, Ore. Approximately 450 workers will be laid off. Navistar plans to consolidate all motor coach manufacturing at its Monaco Coach plant in in Wakarusa, Ind., and the Monaco Coach headquarters will be installed at a Navistar’s new corporate center in Lisle, Ill. Combining all motor coach production in Wakarusa will add about 400 jobs there, Navistar said.
The company will still produce towable vehicles at the Oregon, and maintain a RV service center there. Some finance and information systems operations for Monaco Coach also will remain at the plant.
Navistar’s Workhorse Custom Chassis plant in Union City, Ind., will be closed, affecting 225 employees. The company said these operations will be absorbed by other Navistar plants.
“We understand the impact these decisions have on our employees,” Kapur said. “We will treat people with respect and provide support to help them with their transitions.”
Consolidating the Monaco and Workhorse operations may result in charges of approximately $100 million, Navistar said, but it forecasts ongoing savings of $20 million to $30 million annually from the changes.
Most of the moves are expected during the second half of 2011, but some will take place in 2012.