The Canadian Auto Workers (CAW) went on strike at International Truck & Engine Corp.'s Chatham, Ontario truck plant Saturday following a breakdown in contract negotiations. The strike involves 800 production and maintenance employees.
To cover the loss of plant capacity, International has increased production of conventional heavy trucks at its factory in Escobedo, Mexico. Prior to the strike, production at Chatham had been averaging 39 trucks per day on one shift, International said.
At issue is International's request for cost reductions totaling some $28 million at its Canadian operation, half of which the company sought from pay cuts. Both sides have been in negotiations since April 26 but have been unable to resolve the pay cut issue.
International has said it needs to cut costs, especially in worker pay, to help stem a rising tide of red ink. The company posted losses of $4 million in its second fiscal quarter on revenues of $1.7 billion, a major reversal from the $3 million it earned on revenues of $1.8 billion in the same period last year.
International added that, for the first six months of fiscal 2002, it lost $60 million on $3.2 billion in revenues. That's compared to losses of $32 million on $3.3 billion in revenues over the first six months of 2001.