UPDATE: UAW says foundry closing a surprise-WEB ONLY

The United Auto Workers is hoping to find a way to keep open the foundry that has been associated with an east-side engine plant for 70 years, despite Navistar’s intention to close the whole campus on July 31, putting 700 people out of work.

Navistar said today that it would close the 1.1 million-square-foot plant, which began making engines in 1938 as International Harvester, because it ended a generation-long relationship with Ford Motor Co., supplying diesel engines for its F-series pickup trucks.

“They had met with us a couple of weeks ago and said the engine plant probably was going to close,” UAW Region 3 Director Maurice “Mo” Davison said. “The foundry caught us totally by surprise.”

The Indianapolis Casting Corp. foundry, which employs roughly 500 people, had been somewhat insulated from earlier layoffs because it makes engine blocks for the whole company. Navistar is also making diesel engines for Ford in Huntsville, Ala., and an armored vehicle for the U.S. military outside Chicago.

After meeting with a Navistar representative today, Davison reported, “They’re not sure where they’re going to produce this motor block.”

As recently as 2005, the massive Brookville Road plant seemed poised for long-term growth.

Navistar, which called itself International Truck and Engine Corp. until last year, had invested $300 million to comply with federal environmental standards for diesel engines. The company’s vice president of government relations, Patrick Charbonneau, proclaimed in 2005: “If you would go around the world to look at diesel engine manufacturers, you won’t find one more modern than the one in Indianapolis.”

The contract with Ford was good through 2012, and Navistar planned to launch a marketing campaign aimed at turning the public’s favor toward diesel in all sorts of cars.

An assembly line that weathered a major downsizing in the 1980s began to rebound with the Ford contract – and increasing demand for diesel-powered pickup trucks.
 
In 2005, the company had 1,100 union workers on its assembly line and another 550 at its adjacent foundry, Indianapolis Casting.

The outlook changed in January 2007, when Ford sued Navistar, complaining that its supplier wasn’t sharing in warranty costs on its engines and had raised prices “without adequate explanation or support for its actions.”

The dispute was finally resolved on Jan. 13, but the result did not bode well for Indianapolis. Ford and Navistar said the supply contract would run out on Dec. 31.
 
While executives were wrangling in court, demand for pickup trucks plummeted. In May 2008, Navistar laid off about 500 local assembly workers because of low demand. Spokesman Roy Wiley said layoffs in Indianapolis amounted to about 1,000 for the year.

While the assembly line still employs about 100 people, and the plant has another 100 working in engineering, clerical and other jobs, Wiley said it has not produced a single engine since May.

Severance packages are still to be negotiated. Davison said the UAW would be trying to land benefits for the hundreds of represented workers who were laid off in 2008, as well as the 700 people affected by the closing.

Davison said he’s asking for a meeting with Navistar to reopen the UAW’s latest agreement and try to lower costs. At the same time, he said UAW officials in Detroit would try to put forward an offer to Ford, matching or beating whatever deal the company inks with a new supplier.

“We’re going to do everything we can possibly do to keep that foundry open, as well as keep the engine plant open,” he said.