CHICAGO — A report that Navistar International would shift one-half of its truck manufacturing output from Chatham, Ont., to Mexico unless concessions are made by unionized workers at the plant are unfounded, the truck-maker says.

Earlier this week, Stark’s Truck & Off-Highway Ledger reported that Navistar officials made the threat in order to gain more favorable terms on a new master labor contract with 2000 hourly employees represented by the Canadian Auto Workers. The newspaper said production would be moved to a company-owned plant in Escobedo, Mexico, if CAW Local 127 failed to accommodate the company’s wishes.

Navistar’s existing three-year wage contract with the CAW expires in 1999.

“We’re in negotiations with the union, that’s no secret,” said Don DeFosset, executive vice-president, truck group, at Navistar. “The fact is, we’re entering negotiations a year in advance of the end of the deal. In order to do that, both parties have to agree. These are amicable talks, and getting down to work so far ahead of schedule should be testament to that.”

The Chatham assembly plant currently uses two shifts of workers to produce 119 units of heavy-duty, commercial trucks each day. The plant produced 20,275 trucks there last year, over half of Navistar’s total heavy-truck output.

DeFosset admitted that the Chatham plant is at its full capacity, and that Navistar would like to boost production at its $157-million US complex in Escobedo, Mexico, opened earlier this year. It currently produces 12 units per day, only 15% of the factory’s capacity.

“Workers at Chatham know that Escobedo exists, and that it’s not producing at a rate we would like,” he said. “But we’re not going to play games with the union, not when we have orders to fill.”