International Truck and Engine Corp. has announced it will close its Chatham, Ont. assembly plant early next summer.

The company made the announcement to employees on Thursday, saying the heavy truck plant closure was a necessary step to address competitive market conditions.
In July, the company reached a two-year contract with the Canadian Auto Workers union, which said the company would not close the plant before June 1, 2003. The Chatham plant is currently operating on one shift with about 1,000 employees. In addition to active workers, there are another 1,200 union workers on layoff status.
The exact timing for the closing of the plant will be announced at a later date.
"This has been a very difficult decision, but this decision in no way reflects on the performance of our Chatham employees and the quality trucks they build," said Steve Keate, president of the company's truck group. "Obviously, this decision was made only after exploring every available option to achieve the competitive cost structure needed given industry demand."
Keate noted that this action, along with others, better positions International to profitably serve its heavy truck business and contributes to the company's goal of profitability over the business cycle.
Production of International 9000i Series Class 8 trucks will be transitioned from Chatham to the company's Escobedo, Mexico assembly plant.
The Escobedo plant, launched in 1998, features the latest assembly technology. The plant is both ISO 9000 and ISO 14000 certified.
"We are highly confident that this decision will strengthen our ability to be competitive in the heavy truck business. The Escobedo facility will continue to meet the standard of quality that International products are known for and that our customers expect," Keate said.
The cash impact of the closing of the Chatham plant has been included in the company's 2003 financing plan through 2005. The financial impact of this closing will be included in the company's fourth quarter restructuring charge that will be made public no later than Dec. 3, 2002.
International Truck and Engine Corp. is the operating company of Navistar International. International Truck and Engine is a leading producer of mid-range diesel engines, medium trucks, heavy trucks, severe service vehicles, bus chassis