Most of the 1,000 Navistar jobs will leave Fort Wayne

Although Navistar International Corp. has backed off plans to consolidate all of its engineering operations at its new headquarters in Lisle, Ill., the company confirmed Wednesday that Fort Wayne will lose the majority of the 1,000 jobs at the company’s Truck Development and Technology Center here.

Navistar still plans to establish an integrated product development center on the former Alcatel-Lucent campus in Lisle, but certain “core features” most likely will be shuffled over to Navistar’s facility in Melrose Park, Ill., as part of an $80-million investment there.

Many of the product development jobs being moved from Fort Wayne will go to Lisle, but some also could end up in Melrose Park, said Don Sharp, Navistar vice president and chief information officer. He could not give a precise estimate of the number of jobs that would be transferred, just that it would involve all of Fort Wayne’s product development jobs. Those positions consititute the majority, but not all, of the employment here.

The core features expected to go to Melrose Park are what Navistar calls “development cells,” including engine testing and diesel fuel storage. Those were the elements of the plan that some neighbors in Lisle had strongly opposed, leading Navistar in May to temporarily withdraw its plans to relocate its headquarters.

The company, currently headquartered just a few miles away in Warrenville, Ill., announced Wednesday it plans to invest $110 million in the Lisle campus and another $15 million in a new parts facility that will be located somewhere within the northern Illinois area.

Sharp was one of the Navistar executives who met recently with Mark Williams, of Columbia, S.C.-based Strategic Development Group, a consultant the Fort Wayne-Allen County Economic Development Alliance hired with city funding to persuade Navistar to maintain a presence in Fort Wayne.

“It was a good conversation. We talked about where we are, and we reiterated our message about ramping down our operations in Fort Wayne,” Sharp said.

The talk did nothing to change Navistar’s plans to relocate its product development staff, but there was a discussion of the possibility that Navistar might expand the test track facility it already has in Fort Wayne, Sharp said.

Other possibilities also were discussed, but it’s too early to talk about those, Sharp said. “It was really, from my perspective, just talking about ideas.”

The door also was left open for future discussions. “We’ll certainly continue to have conversations as long as it makes sense,” Sharp said.

The city of Fort Wayne provided the $95,000 in funding for the Alliance to hire the consultant to assist in what it called its “Navistay” initiative.

Andi Udris, president of the Alliance, said local officials will continue focusing on the roughly 200 jobs associated with the test track.

“We’re going to try to do what we can to keep as many of the jobs here,” he said. “Of those (test track jobs), how many might we be able to retain.”

Meanwhile, Kathleen Randolph, CEO of WorkOne Northeast, said her organization will continue retention efforts involving Navistar employees who may either lose their jobs or face relocation.

“I am disappointed (by Wednesday’s announcement),” she said, “but WorkOne is ready to serve those individuals who will be dislocated as result of this move to Illinois.”

WorkOne recently announced it was making available $700,000 in federal money for on-the-job training for Navistar workers who secure other positions in northeast Indiana.

“It’s going to become imperative for us to determine what (Navistar’s) specific plans are, because we’ll want to customize our services to support the individual worker groups that are going to be dislocated,” Randolph said.

The first workers could begin moving into the Lisle campus in late spring 2011. Whether Fort Wayne workers will be in the first wave has not be determined, but operations here are expected to ramp down over a two- to three-year period, Sharp said.

Some employees from Fort Wayne already have made company-sponsored bus trips to check out the Chicago area, sources said.

The state of Illinois provided Navistar a package of incentives, primarily tax credits for investment and job creation, that totals almost $65 million.

“Navistar knows that there is no better place to expand its operations than Illinois, and we tailored a targeted investment package to meet the company’s needs and keep thousands of people working,” Illinois Gov. Pat Quinn said in Wednesday’s announcement from Navistar.

Although a cost study comparing Fort Wayne and Lisle for the headquarters was commissioned by the company, Navistar officials have said all along Fort Wayne wasn’t really in the running as a headquarters site.

Also on Wednesday, Navistar reported net income for its third quarter, ended July 31, of $137 million, or $1.83 per share, on revenue of $3.2 billion. That reversed a loss of $12 million, or 16 cents per share, reported in the third quarter a year ago.

Navistar’s third-quarter sales fell short of analysts’ expectations, however, and the company also lowered its full-year sales forecast to $12 billion from a range of $13.2 to $13.7 billion. In early afternoon trading on the New York Stock Exchange, the company’s stock had dropped $3.35 per share, a decline of more than 7.5 percent.