Navistar will add 300 jobs in Springfield in a second deal with GM, doubling the new jobs from the partnership and further cementing the truck maker’s long-term presence in Clark County.
The news is another sign of Navistar’s dramatically improving fortunes in Springfield. As recently as 2010, the Springfield plant had as few as 300 workers and many people worried it might close. Now the site will regain its status as one of the city’s largest employers.
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The new agreement calls for Navistar workers to build a cutaway model of GM’s G Van beginning early next year.
The two manufacturers also made a joint agreement in September to build medium-duty trucks in Springfield, along with a pledge to add at least 300 jobs for that work over the next three years. That means combined that at least 600 more people will work in Navistar’s Springfield plant.
Navistar will reopen a manufacturing line in Springfield that has been closed since about 2001 to build the G Vans.
The plant currently employs close to 1,500 workers and the company has thousands of retirees in the area.
The new work is also significant because it could attract more jobs at other companies that supply parts to Navistar, said Mike McDorman, president and CEO of the Chamber of Greater Springfield.
“600 jobs over the next couple years is huge for our community and our economy,” McDorman said “These are well-paying manufacturing jobs and as we move forward as a community, these are the jobs that are going to be the staple for what we’re trying to do in diversifying our jobs base.”
The new agreement could create as much as $10.4 million in new payroll, according to information from the Dayton Development Coalition.
Navistar will receive a $200,000 Jobs Ohio workforce grant under the newest GM agreement.
The new deal will also mean more investment to improve the Springfield facility, although the exact value of those improvements is still being determined, said Jason Barlow, president of the UAW Local 402.
Moving production of the van to Springfield frees up space for GM at its facility in Wentzville, Mo., Barlow said. GM also produces the Chevrolet Colorado and GMC Canyon at that site.
The vans can be sold to a variety of commercial customers and used for purposes ranging from ambulances to hotel or airport shuttles and moving vehicles, Barlow said.
“They need more capacity and GM has all the confidence that we can provide a quality vehicle for the industry and we’re thrilled to be able to do that,” Barlow said.
The agreement makes sense for both GM and Navistar, said Bill Osborne, Navistar’s senior vice president of global manufacturing and quality. The heavy truck market is expected to face weak demand in the near future, but the market for the GM vans is much more stable, he said.
“It allows GM to focus on their very profitable Colorado and Canyon product lines and obviously it gives us the opportunity to solidify volume for the Springfield plant for a number of years to come,” Osborne said. “It provides a lot more job security and gives us the opportunity to weather cyclical changes in our industry.”
Much of the credit for the turnaround should be directed to Springfield’s workforce and union leadership, Osborne said, as they were willing to work with management to implement lean manufacturing.
Last year the union and truckmaker reached a four-year labor agreement after negotiations stretched on well beyond the original deadline. But Osborne said both sides committed to making a deal happen and built trust during that process.
Thursday’s announcement wasn’t a sure bet despite the joint agreement last fall between GM and Navistar to produce medium-duty trucks, Osborne said. GM was talking to other manufacturers but union leaders in Springfield worked with management at Navistar to offer a competitive package.
“It wasn’t what I would call an inside deal,” Osborne said. “It was an open bidding process and we went after it with great vigor.”
The new jobs will also likely offer a higher wage than similar jobs in other industries, said Tom Franzen, assistant city manager and economic development director for Springfield.
“The real positive here is that these jobs, because of the contracts and negotiated wages, are going to be higher than the average wages we currently have here,” he said. “They’re manufacturing jobs and they’re good-paying manufacturing jobs.”
Earlier this week, Navistar reached a milestone when it reported a $4 million profit in the second quarter of this year. That was the first profit the company had recorded since 2012.