CHICAGO -- International Harvester announced Monday it will keep its truck assembly plant in Springfield, Ohio, and close its plant in Fort Wayne, Ind.
The closures are part of the debt-choked agricultural equipment and truck producer's massive restructuring plan, which called for consolidating plants in the Midwest and Canada. Harvester said it will continue construction at its truck assembly plant at Chatham, Ontario, which gives IH a Canadian base so the company can avoid paying duty on trucks imported to Canada from the U.S.
Both Indiana and Ohio had made several financial concessions in hopes of winning the plant
IH spurned a $31 million offer of financial incentives from Indiana to keep the operation in Fort Wayne. Ohio's package was about $30 million.
IH president Donald Lennox said offers of economic assistance from both communities were so nearly equal that that factor did not provide an edge to either plant in the decision-making process. He was to hold a news conference later in the day at Springfield.
The Springfield plant employs 2,300 people. With the consolidation, IH officials 'are predicting another 1,500 new jobs at Springfield by the end of 1983, with the majority added next year,' Paul Deal, manager of truck communications, said.
About 2,200 workers will be affected by the truck assembly plant closing at Fort Wayne. Another 1,900 workers employed at Harvester's Fort Wayne axle and transmission plant, world wide truck engineering center, material management center and parts distribution center will retain their jobs.
The company said the transfer will begin in November and operations will be gradually phased out in Fort Wayne, with the process completed by the end of 1983.
'We reached our decision to close with deep regret, but it was a necessary decision to protect the future of the company and overwhelming majority of IH employees,' Lennox said. 'We've been deeply moved by the expression of support by the communities of Springfield and Fort Wayne since it became known consolidation would be required.
'It is truly unfortunate that a choice was necessary,' he added. He said Indiana officials prepared 'an excellent proposal for consideration.'
'Their tireless work reflected the commitment by all the people of Fort Wayne to maintain the assembly operation there.'
He said the company will meet all of its contractual obligations under terms of its contract with the United Auto Workers, which represents production, maintenance and clerical employees at both plants.
Ohio last week sweetened the deal for the truck plant by raising from 50 to 85 percent the amount of a $20 million bank loan the state will guarantee.
Ohio also is loaning $10 million backed by the state's liquor profits, meaning the state will be underwriting 90 percent of the $30 million package offered to Harvester.
A consortium of 11 Springfield-area banks is putting up the $20 million. The Springfield-Clark County Community Improvement Corp. will purchase the 17-year old truck plant, which makes medium-size trucks, and lease it back to IH for operation.
State development officials believe the plant will cost only about $26 million, making the state's exposure about $24 million in the event of a bankruptcy. But they are counting on its worth to a potential buyer to offset that liability.
Development officials say loss of the Springfield plant would have cost the state $150 million to $200 million a year in lost taxes and increased unemployment benefits.
The state's $10 million direct loan is repayable in 20 years at 2 percent interest the first 10 years and 10 percent the second 10 years. However, officials expect the loan to be repaid in 10 years if the truck plant is successful.
Harvester's restructuring plan is designed to return the company to profitability by late 1984. IH has lost more han $1 billion since a disastrous six-month strike in 1980, and earlier this year restructured more than $4 billion in debt held by 225 lenders.
Losses this year are projected at $1.6 billion.
