Navistar Closing Plants, Consolidating Operations

Aug. 26, 2011
'We're seeing a tremendous benefit from our flexible manufacturing strategy.'

Navistar International Corp. earlier this month said it will close its Chatham, Ontario, truck factory, as part of a consolidation push that will impact several other North American plants.

The company also said it will scale back operations at its motor-coach manufacturing plant in Coburg, Ore., and close its Union City, Ind., chassis plant.

"From a capacity standpoint, we are well-positioned to meet demand expected in the last half of 2011 and further increases in 2012," said Dee Kapur, president, Navistar Truck Group.

"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."

The Chatham plant, which made International trucks, has been idle since June 2009 due to a contract impasse with the Canadian Auto Workers.

Other Navistar truck plants already have absorbed the Chatham facility's production, the company noted.

The closing of the Union City, Ind., facility, which makes Workhorse chassis for RVs, trucks and buses, will affect approximately 225 employees, according to Navistar.

The company said it will consolidate Union City's operations into other Navistar facilities "for greater efficiency and productivity."

The closing of the Coburg, Ore., plant, which makes Monaco RVs, will affect approximately 450 people, according to Navistar.

"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."

Shifting Motor-Coach Production to Indiana

The company will shift all RV production to its Wakarusa, Ind., manufacturing facility, and will move certain Monaco headquarters functions from Coburg, Ore., to Navistar's new corporate campus in Lisle, Ill.

The company said it plans to continue producing towables and retain certain finance and IT operations in Oregon, as well as maintain an RV service center there.

Consolidating motor-coach production into the company's Wakarusa, Ind., plant will add about 400 jobs at the Wakarusa facility, Navistar noted.

Warrenville, Ill.-based Navistar expects to take a hit in restructuring charges of between $100 million to $130 million, most of which will occur in the second and third quarters.

When the dust settles on the consolidation moves, the company said it expects to save between $20 million and $30 million annually.

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