Aftermarket

UAW Strikes Navistar

October 24, 2007

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The UAW Tuesday evening announced a strike against Navistar International, affecting about 4,000 union members in six states. The union says Navistar, which is the parent company of International Truck and Engine, transferred
work from the International Truck plant in Springfield, Ohio, to plants in Mexico and Texas, violating a labor agreement that forbids such moves. Navistar says those claims are without merit.
The Navistar/UAW contract expired the first of this month. Reuters reported that the strike came after two days of intensive contract talks between the union and the Chicago-based company.
Navistar said it expected that the strike would not disrupt sales.
Analysts at Bear Stearns note this "might not be a bad time for NAVZ to take a strike (considering how weak truck demand is currently) if it leads to a materially improved cost structure. A similar scenario arose in the 2002 negotiations -- also at trough-like levels in the Class 8 cycle -- that we believe led to an improved contract for NAVZ."

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