FORT WAYNE – It's all over but the packing.
Navistar International Corp. on Wednesday said it will invest $205 million to create new headquarters, technology and parts operations in suburban Chicago.
The announcement extinguishes all but the most stubborn doubt that Warrenville, Ill.-based Navistar is making good on its word to "phase down various operations" in Fort Wayne over the next two to three years.
Some local economic development officials continue to clutch at a sliver of hope, however.
Navistar employs about 1,400 locally, including contractors.
Don Sharp, Navistar vice president and chief information officer, said Wednesday it's too soon to know how many Fort Wayne employees will be offered jobs when operations move to Illinois.
And, of course, it's too soon to speculate how many workers would accept those jobs and how many would choose to remain in Fort Wayne, said Sharp, the executive heading the corporate consolidation project.
WorkOne Northeast and the city of Fort Wayne are working together to create options for workers who prefer to stay here. Those include retraining scholarships and job placement with other employers.
More plan details
Navistar announced Wednesday it will invest $110 million in a new headquarters in Lisle, Ill. The 1.2 million-square-foot former Alcatel-Lucent East campus will house executive management, business operations and product development.
A second location will house the company's technology center. Navistar is considering an $80 million upgrade of its facility in neighboring Melrose Park for the center. Sharp said a few internal issues need to be ironed out before that plan is finalized.
Navistar also plans to invest an additional $15 million in a new parts operation in northern Illinois. The location had not been decided as of Wednesday.
The plans don't include a test track, which could open the door for an arrangement that involves Fort Wayne. Mayor Tom Henry has hoped to use the company's local test track to persuade Navistar to keep at least a small workforce here.
Navistar intends to use someone else's test track, Sharp said. The company doesn't use it often enough to justify building and maintaining its own test track, he said.
The Fort Wayne test track doesn't meet Navistar's long-term needs anymore, Sharp said. But the company would consider using a test track here if someone else built it.
"It's certainly something we'd look at on a longer-term basis," Sharp said.
He declined to say whether Navistar would be willing to sign a long-term contract with a test-track owner.
Sharp didn't have immediate access to the number of workers assigned to the local test track, but he described it as a small number. Previously, Henry estimated 200 employees are part of Navistar's test-track operation.
"That seems high to me," Sharp said. "I don't think we'd be anywhere near that number."
An independent test track that served multiple client companies would probably need more workers than Navistar has assigned to its test track, Sharp said.
Offering incentives
Local economic development officials worked months to create an incentives package tempting enough to woo Navistar. The effort was headed by the Fort Wayne-Allen County Economic Development Alliance.
Alliance officials declined to make details of the package public, citing fear that other communities would use the information to create a more attractive offer.
Illinois has committed up to $65 million in incentives for Navistar's move. Gov. Pat Quinn directed state officials to work with Navistar to create the package, which includes tax credits for creating or retaining jobs and making significant capital investments.
"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," Quinn said in a written statement.
"By being innovative and aggressive, we're seeing significant investment in Illinois, which is creating more jobs and moving our economic recovery forward," he said.
Navistar will retain or create about 3,000 permanent jobs over the next several years in northern Illinois and create more than 400 temporary construction jobs, according to the announcement. The company employed 15,100 worldwide as of October, according to its website.
The local effort to court Navistar included hiring a consultant with experience in persuading a corporation of the economic benefits of staying put rather than consolidating operations. The argument has solid backing.
An Ernst & Young 2009 comparison study found it would cost Navistar $31 million less a year to do business in Fort Wayne than in Lisle.
Never say die
Mark Williams, president of Strategic Development Group, met with Navistar officials in Chicago two weeks ago and expects to meet with them again.
Those talks, which are secret, have given Alliance President Andi Udris hope that all is not lost.
Udris is not abandoning efforts to woo Navistar, despite Wednesday's announcement. He said no part of it was a surprise.
Udris pointed out the official news release said Navistar will "possibly" put the technology center in Melrose Park. Although the release specifies the new parts facility "will be in the northern Illinois area," no such parameters were drawn for the technology center, which is expected to employ many of the engineers now working in Fort Wayne.
Navistar spokeswoman Jillane Kleinschmidt said company officials didn't send a hidden message by neglecting to specify in the statement where they plan to put the technology center. The goal is to create an integrated product development organization, she said. To accomplish that, Navistar wants its technology center close to product development, which will be in the Lisle headquarters.
Lisle is 180 miles from Fort Wayne.
But until the contracts are signed, Udris plans to keep working to create an attractive deal.
"We're still pressing our proposals to them," he said. "Clearly, we think there are some viable options that the company should see."
Udris said there's no doubt Navistar officials want to keep the technology center close to the new Lisle headquarters.
"But the question is, can it fit?" he said.
Kleinschmidt said space isn't an issue at the Melrose Park location. She also said the company's decision to phase down operations in Fort Wayne "is definitive."
Udris said local officials want to put all options in front of Navistar until they make a final decision.
