Released on July 14, 2010

Union employees of truck maker Navistar’s Indianapolis Casting Corp. (ICC), Indianapolis, agreed to a new labor agreement that has stopped closure procedures that have been underway at the metalcasting facility for more than a year.

The employees, represented by the United Auto Workers (UAW) union, “voted to approve significant flexibility and cost improvements” as part of the agreement, according to a statement issued by Navistar. With the agreement in place, the metalcasting facility, which was set to close in two days, will now eventually resume production.

Because closing procedures were nearly complete, the metalcasting facility is expected to continue in its idled state through the summer and begin a slow ramp-up in late fall based on demand.

“Like many of the markets where we compete, the [metalcasting] business is extremely difficult,” said a spokesperson for Navistar whose name was withheld. “Our ICC business was no longer viable, and it took these changes in order for Navistar to continue to produce blocks at this [facility].”

Navistar believes the changes to the labor agreement will improve competitiveness by increasing health care cost-sharing by the UAW-represented employees, expanding flexibility of job functions and creating a more predictable and flexible cost structure.

“This is a more contemporary labor contract,” the spokesperson said. “It’s reflective of the tough market, the global industry and the constantly changing requirements needed to compete.”

The new five-year agreement is reported to be “stand-alone,” meaning it is separate from other contracts and no longer negotiated as part of the multi-site main labor agreement Navistar has with the UAW.