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Navistar finishes 2009 fighting for Army contract

Hope alive for plant as union president notes increase in orders

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By Elaine Morris Roberts, Staff Writer 6:30 PM Saturday, November 21, 2009

SPRINGFIELD — A contingent comprised of 12 Ohio members of Congress have come out in support of Navistar International’s bid to gain a contract with the U.S. Army to build armored tactical vehicles.

The contract, awarded to Wisconsin-based Oshkosh earlier this year, is now under review by the Government Accountability Office after Navistar and BAE, the previous provider, filed protests.

A letter generated by U.S. Rep. Steve Austria’s office was issued Nov. 2 asking the Secretary of the Army to release “any information or briefings” provided to other interested parties.

In addition to Austria, R-Beavercreek, supporters named in the letter included U.S. Sens. George Voinovich and Sherrod Brown, and U.S. Rep. Jim Jordan, R-Urbana.

This is the second letter written in support of Navistar, according to Mike Smullen, legislative director to Austria.

A few weeks ago, Smullen said, representatives from Navistar asked Austria to write a letter of interest to the Secretary of the Army to highlight Navistar’s capabilities with regard to fulfilling the available military contracts.

When the contract went to Oshkosh, Austria spearheaded the effort to support local jobs.

“I will continue to support Navistar and its work force and was disappointed the Army awarded a recent contract that would have created new jobs in the Springfield area to an out-of-state company. That is what prompted me to lead a bipartisan, Ohio delegation letter to request a meeting with the Army to learn what factors they used to make their decision,” Austria wrote this week in an e-mailed statement to the News-Sun.

The question now is whether any of the already-awarded contract work can be redistributed to other companies.

To find out, the next step, Smullen said, may include a briefing to discuss the government’s bidding process and to find out how Navistar can remain competitive.

While he doesn’t foresee a change in the current contract award, he said it is important to “continue to make the Army aware of the benefits of doing business with Navistar.”

Navistar spokesman Roy Wiley could not comment on specifics because the review process is under way, but said he expects a decision soon.

“I would expect a decision in the next few weeks,” he said. “There can be no building of vehicles until the process is completed.”

Any military work brought to Navistar’s Springfield facility would be welcomed by members of United Auto Workers union Local 402, who currently build medium-duty trucks.

The government contract under review contains an order for 25,000 to 35,000 vehicles to be built over a five-year period.

“If Springfield had a contract that would guarantee an additional 7,000 trucks per year, we could bring the majority of our members back to work,” said Jason Barlow, UAW Local 402 president.

There are about 471 UAW members at the assembly plant and 70 members at the Truck Service Center across Urbana Road where workers customize and make minor alterations to Navistar trucks from other production facilities.

There are about 70 members of UAW Local 658 working at Navistar, which represents clerical and technical workers, Barlow said.

Some good news

Even though truck orders remain soft, they are picking up.

“On a positive note, our order board is the highest it’s been in over three years. Orders are coming in and there’s a pretty strong demand for trucks. ... Several months ago we were receiving orders for only about 30 to 40 trucks per day, which barely supported what we were doing,” Barlow said.

While he can’t give an official number of trucks produced per day, he said, “We’re doing pretty well. We hope it never drops down.”

The increase in orders has allowed the union to recall some workers, but about half the members remain laid off.

The TSC is doing well and looking at the possibility of introducing some new work at their facility, he said.

There may be a small order surge due to upcoming changes to EPA emissions regulations which will cause price increases.

Navistar trucks will increase by $2,000 in January and another $6,000 in May, which will be lower than some other producers, Barlow said.

Springfield has also picked up a small amount of business resulting from the closure of General Motors’ medium-duty line and Sterling, a division of Daimler AG.

Preparing for what’s next

With less than a year before their main contract expires, Barlow said union leadership is working to prepare its membership.

There are some worries, he said, that the slow economy and changes to the truck industry that the company may be looking for way to reduce costs that may impact Springfield.

There have been some moves by the company to shift production to nonunion facilities, which, according to Wiley, has nothing to do with unionization and more to do with reducing overhead and utilizing more modern facilities.

Barlow is not so sure.

“I believe the company is always looking at the possibility of reducing dependence on union labor,” he said. So far, he said, the company has closed its Indianapolis engine plant, and the foundry is scheduled to shut down Dec. 31.

Other work across the company has been shifted to nonunion facilities in Tulsa, Garland, Texas and Escobedo, Mexico.

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