Press Release by Navistar, June 19, 2002

Press Release by Navistar, June 19, 2002

WARRENVILLE, Ill., June 19 /CNW/ -- To continue to meet customer demand, International Truck and Engine Corporation announced that it will resume production of premium conventional heavy trucks with a temporary workforce at its Chatham, Ontario assembly plant, as soon as possible. The company will continue to draw upon production at its plant in Escobedo, N.L., Mexico.

International Truck and Engine is the operating company of Navistar International Corporation (NYSE: NAV). The Canadian Auto Workers (CAW) union Local 127 went on strike June 1. The strike affects approximately 645 CAW-represented production and maintenance employees at International's Chatham plant.

International had held talks with the CAW as recently as yesterday, but those ended late in the day, and there are no new talks scheduled. The company said it is still open to a dialogue with the union in order to return to productive negotiations, achieve a new labor contract and resume normal operations at Chatham with CAW members.

"We had hoped to have an agreement by now, and have made every effort to do so, but we were not able to reach an agreement," said Steve Keate, president, truck group. "To meet the needs of our customers, therefore, we now need to activate another element of our contingency plan, which is to resume production at Chatham now, using temporary workers. We would prefer to resume production with our regular Chatham employees, but we must continue to meet our customer commitments."

The company also said it is working closely with local authorities on plans to resume production using temporary workers. The use of temporary workers has been permitted by Ontario law since 1995.

Negotiations towards a new labor agreement began on April 26. However, in January, the company had notified the CAW of its need to reduce costs at Chatham by $28 million in order to make the plant competitive. The company was subsequently able to identify half that amount.

Prior to the strike, production at Chatham had been averaging 39 trucks per day on one shift, and it is expected to ramp up to a level of 60 per day. The Escobedo plant will continue to increase production to 58 units per day.

In addition to heavy trucks, International Truck and Engine is a leading producer of mid-range diesel engines, medium trucks, severe service vehicles, and a provider of parts and service sold under the Internationala brand. IC Corporation, a wholly owned subsidiary, produces school buses. International also is a private label designer and manufacturer of diesel engines for the pickup truck, van and SUV markets.

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