By Susan Kelly
CHICAGO, Sept 30 (Reuters) - With a strike deadline just hours away, truckmaker Navistar International Inc. and union workers were still far from reaching agreement on a new labor contract, a union official said on Monday afternoon.
Members of the United Auto Workers union at four Navistar truck and engine manufacturing plants are prepared to walk off the job and set up picket lines shortly after midnight unless a new labor pact is reached or the current three-year contract temporarily extended, said Charlie Bush, president of UAW Local 402 in Springfield, Ohio.
Talks between the company and the union have been under way since July 24.
"The appearance is that they are just too far apart to cover that much ground in that short of time," Bush told Reuters.
The current contract, which expires at midnight, covers about 7,200 active and inactive UAW members at plants in Springfield, Ohio; Indianapolis; Fort Wayne, Indiana; and Melrose Park, Illinois.
The workers, who voted in August to authorize a strike, will not remain on the job without a contract, Bush said.
Health care benefits and work rules appear to be key sticking points in the negotiations.
Navistar, which has reported a string of earnings losses this year and said it will lose money again in its fiscal fourth quarter, has said it is seeking more flexible production scheduling and manageable health care costs in its negotiations with the UAW.
"We're not interested in rollbacks or mandatory overtime. Those are two subjects that are dear to our hearts," Bush said.
A Navistar spokesman declined to comment on the status of the union talks but said the company has plans for maintaining production if a strike should occur.
"We have contingency plans that will enable us to serve our customers and dealers," Navistar spokesman Roy Wiley said Monday.
Navistar last month said it would lay off as many as 2,050 workers, or almost 15 percent of its U.S. work force, as it retools plants in Springfield and Indianapolis to produce its next generation of trucks.
The job cuts, which had been expected, are part of a larger effort at Navistar to streamline production and reduce labor and other fixed costs begun five years ago under Chief Executive and Chairman John Horne.
Horne has said the company wants to get its average hourly wage and benefit costs down to under $25 per North American worker from about $30 currently.
The company has also warned that up to 500 workers at its Chatham, Ontario, facility could face layoffs after Nov. 1 because of an expected slowdown in orders after the U.S. government's Oct. 1 deadline for diesel engines to meet tougher pollution standards.
The company had threatened to close the Chatham plant but agreed to keep it open for at least one more year after a bitter six-week strike by members of the Canadian Auto Workers union that ended in mid-July. At Chatham, workers agreed to allow scheduled overtime.