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Navistar closing Ontario plant, cutting U.S. jobs

By A. Ananthalakshmi and Lynn Adler

NEW YORK (Reuters) - Navistar International Corp is closing an idled plant and restructuring other business that would result in up to $30 million in annual savings and 675 job cuts.

The truck and engine maker said that it would close its Chatham, Ontario, truck manufacturing plant, where employees were on layoff status for two years because of the company's inability to reach a collective bargaining agreement with the Canadian Auto Workers.

Chatham production has been absorbed by other Navistar truck plants, and "from a capacity standpoint, we are well positioned to meet demand expected in the last half of 2011 and further increases in 2012," Navistar Truck Group President Dee Kapur said in a statement.

Closing the Chatham facility is a "devastating blow" to the workers, the families and the community said Canadian Auto Workers President Ken Lewenza.

"Despite our relentless efforts since 2009 to reopen the idled facility and get our members back to work, Navistar has remained rigid and is now moving ahead with plans to shutter the plant," Lewenza said.

Navistar said it will significantly scale back at its Monaco recreational vehicle unit and motor coach manufacturing plan in Coburg, Oregon, which will result in the layoffs of about 450 workers, said company spokeswoman Karen Denning. All motor coach production will happen at Monaco's Wakarusa, Indiana facility.

The company's Workhorse Custom Chassis unit plans to close its Union City, Indiana chassis plant, resulting in about 225 layoffs. Navistar will consolidate operations into other facilities.

Combining all motor coach production in Wakarusa will add about 400 jobs at that facility.

Navistar expects planned restructuring and asset impairments related to the Chatham closing to result in charges of $100 million to $300 million, mostly pension and retiree healthcare costs.

The Monaco/Workhorse consolidation may result in about $100 million in charges.

Navistar expects to record most of the charges in the third and fourth quarters of 2011 and the remainder in 2012. The company expects savings of $20 million to $30 million annually.

Navistar shares fell 5.1 percent to $47.86 on Tuesday on the New York Stock Exchange.

(Reporting by A. Ananthalakshmi and Lynn Adler. Editing by Robert MacMillan)

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