Bad news for International

[K5Fury]

August 29, 2006


Diesel maker plans 417 layoffs
Automaker Ford's woes have ripple effect on Powerstroke supplier International Truck

By Ted Evanoff
ted.evanoff@indystar.com
August 29, 2006


In the 23 years since Joe Dobson came to Indianapolis to work on International Truck's engine line, he could count on one sure thing. Every year, Ford sold more diesel pickup trucks. And every year, Dobson's engine line made more diesels for Ford.
Now that certainty is fading as Ford is struggling.
On Oct. 2, about a third of Dobson's co-workers will be laid off when International Truck and Engine, based in Melrose Park, Ill., idles 417 of its 1,100 local employees, the company said Monday.
In a sign of the slowing truck market, the workers may not be recalled until January. Even that recall will depend on whether Ford has sufficient orders for its diesel-powered pickup trucks.
"The diesel business has just been going great until this year. We haven't really had a layoff like this for 20 years," said Dobson, 60, Lawrence, formerly of Illinois. He works on the assembly line turning out the plant's only product, a 6-liter diesel used only in Ford heavy-duty F-series pickups.
International Truck, part of Navistar International of Warrenville, Ill., has been a steady employer in Indianapolis ever since Navistar predecessor International Harvester signed a plant-saving agreement in 1983. That deal converted the factory to diesel engines and promised to supply Ford pickups exclusively.
Since then, Ford has bought more than 1 million of the diesels, marketing them as the Power Stroke brand. The agreement continues through 2012. But just as Ford this month started to promote a larger 6.4-liter Power Stroke to be made in Indianapolis next year, high gas prices eroded the pickup market. Cash-strapped Ford stumbled.
International already had scheduled three weeks of late-summer downtime to accommodate slumping Ford orders. Then, Ford suddenly decided to cut fourth-quarter auto production 21 percent to avoid paying heavy consumer incentives to keep sales rolling.
Now, International intends to lay off what amounts to an entire shift until orders rebound from its only customer, Ford's Kentucky Truck plant at Louisville. It'll be International's largest layoff since 350 were temporarily idled in 2002.
In Indianapolis, plans call for layoffs of 380 workers represented by the United Auto Workers and another 37 nonunion and white-collar workers.
"This is being driven by truck production cuts at Ford," International spokesman Anthony Page said. "When we call people back, it'll be based on demand for the new engine."
International's Eastside foundry, the 550-employee International Casting, will continue operations without layoffs. It supplies International diesel plants in Indianapolis, Melrose Park and Huntsville, Ala.
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