Idle plant gets little hope from Navistar
Top Navistar officials talked about brighter profit prospects Wednesday but offered no new insight on the future of the company's idle truck assembly plant in Chatham that has kept employees off the job for almost 8 1/2 months.
Chief executive Dan Ustian told analysts the profit outlook of U.S.-based Navistar will improve this year because of a big military order and mentioned the Chatham plant only briefly once during a 90-minute conference call.
That reference provided little additional hope for a reopening, since Ustian said profit margins in the latest quarter improved partly because of the transfer of production from the idle Chatham operation to a company facility in Mexico.
"That will continue to be that way," Ustian said about better overall profit margins on manufacturing operations this year.
The company reported its profits plunged 93 per cent to $17 million (U.S.) in the three months ending Jan. 31 from $234 million in the same quarter a year earlier. However, the company expects profits to climb in later quarters as orders increase because of the economic recovery in North America.
Navistar, an international heavy truck manufacturer, stopped production of its ProStar and LoneStar models at Chatham in June last year as the market deteriorated in the recession. The move also adversely affected regional suppliers.
At that time, the company laid off about 350 employees when negotiations for a new contract with the Canadian Auto Workers hit an impasse. The two sides met for exploratory talks in December, but those discussions fizzled.
Navistar spokesman Roy Wiley said the company wants to meet but the union needs to show a willingness to move from its bargaining position.
The union has said Navistar's proposals would "gut" the last contract by trimming benefits, freezing pensions, eroding seniority rights and eliminating most jobs.
Many Navistar employees, who earned an average of about $24 an hour, have started to look for new work or careers because of the lengthy shutdown and no sign of a resumption of operations, according to union officials.
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