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Naperville Sun: Navistar seeks to explain itself

March 12, 2010

By HANK BECKMAN For Sun-Times Media

In an effort to put rumors to rest and clarify his company’s intentions, Navistar Chief Executive Officer Dan Ustian got up early Thursday and had breakfast with about 300 local business leaders.

Speaking of his company’s recent history, he summed up the rationale behind the company’s recent operations and the proposed move of its world headquarters from Warrenville to the vacant Lucent campus in Lisle in a single sentence: “It’s all centered around product,” he told the crowd at the Lisle Hilton.

Navistar in Warrenville has submitted a zoning petition to renovate and redevelop the 88-acre Alcatel-Lucent Technologies campus in Lisle for a new international headquarters, where it could consolidate many functions.
(James C. Svehla/Staff Photographer)

Navistar’s aerial site plan for the vacant Alcatel-Lucent Technologies campus in Lisle.
(Submitted/Navistar)

Ustian gave a short history of Navistar, highlighting its origins as International Harvester and joking that Abraham Lincoln lost his last court case before entering politics in a patent case involving IH.

He described a business that has undergone fairly rapid transformation in the last generation, moving from largely agricultural machinery and truck products to a firm that produces military vehicles, school buses, RVs and trucks of both the small and large variety.

The key to Navistar’s growth has been consistent development of a variety of diesel engines. Ustian stressed the “green” emphasis Navistar places on its testing, noting that Navistar’s diesel engines were “99 percent cleaner” than they were in 2000 and would by the year 2012 emit nearly zero emissions.

That testing has caused some concern among area residents, many of whom believe the early proposal to have more than 60 testing cells in close proximity to residences and Giant Steps Illinois, an autistic school, would emit dangerous levels of toxic emissions in an area that was not zoned for heavy manufacturing.

Ustian sought to allay fears by stressing the new proposal put forth by the company March 4, which would restrict the number of testing cells to six — two of which would be for hybrid technology — and run tests only during normal working hours.

The new proposal also reduces the amount of fuel that can be stored to 12,000 gallons, which company officials have pointed out is less than some service stations. “It’s (diesel) the least combustible fuel in the world,” he said.

Moreover, the new plan calls for the new Lisle Technology Center to be moved away from the school and residences to the northwest section of the site.

Given the fragile state of the economy, Ustian stressed the benefits of the economic development Navistar would bring to Lisle. He estimated the project would produce, directly or indirectly, about 7,000 local jobs. About 1,500 would come from Warrenville; another 1,500 would be new to DuPage County; 800 to 1,000 would be new to Illinois.

Ustian said Navistar would spend roughly $100 million on the project and, in reference to tax increment financing that would be part of the development, said the company only wanted “relief on the increment.”

Lisle Mayor Joe Broda thought the breakfast went well and said “the information that was presented was good,” singling out the clean diesel development as especially informative.

Naperville City Councilman Bob Fieseler, an enthusiastic supporter of green development, seemed to endorse the project. “This is the future for job growth,” he said, and “It’s in line with all of the clean energy initiatives Naperville is promoting … it will increase our talent base.”

Naperville District 203 Superintendent Mark Mitrovich was cautiously optimistic, saying “there’s a lot of misinformation out there and they need to sit down with us” to discuss possible ramifications of TIF financing for the school district.

Navistar officials have estimated the tax benefit to District 203 to be just short of $1.4 million, assuming TIF financing, but with the general controversy regarding TIF districts freezing tax money to local governments at pre-TIF levels, Mitrovich is withholding judgment.

Some who have opposed the project in its original form were in the audience and took a wait-and-see approach.

Rich Wilkie challenged Ustian’s figures on both the environmental and economic impact and asked if Ustian would be willing to meet with residents; Ustian said he would.

Julie Schnell was skeptical. “This is their version the story,” she said. “FOIA requests have produced a lot of information to the contrary.” As for Ustian’s promise to meet with community members, Schnell said simply, “let’s see if he does.”

After the breakfast, Navistar representatives Don Sharp and Dennis Culloton met with The Sun staff and tried to explain some of the misunderstandings between Navistar and the community.

Sharp said the company was to blame for not explaining the proposal as accurately as it should have. The new proposal is “very different from the one we submitted,” Sharp said. “We believed it was a conceptual process.” Sharp made it clear that the new site would be a “white-glove research and development center” that would function as a customer showplace.

As for moving operations such as the heavy engine testing operation from Melrose Park, Sharp said it was never in the plan, noting, “We didn’t go through as detailed planning process as we should have.”

As for the general criticism that Navistar failed to reach out to the community, Sharp said it “was completely untrue,” but declined to comment on private conversations.

Sharp went on to acknowledge Mitrovich’s concerns about the impact of TIF financing, saying “we’ll be talking to a lot of folks” and that Mitrovich was “tops on my list.”

Sharp said he understood that residents were worried that the company was trying to gain access to the property under false pretenses, after which it would institute heavy manufacturing and testing. “We would have to go through this planned unit development process again,” he said.

Regarding the concern about the appeal filed by Lucent to seek tax relief from the county, thereby lowering the amount that TIF taxes would be frozen for an undetermined length of time, Sharp said the company was committed to pursue TIF financing at the property’s current value of $109 million.

Saying he was aware that residents had obtained an e-mail from a Lisle village employee that indicated Navistar pushed the tax appeal, he said, “We had no role whatsoever.”

 

Naperville Sun:  Navistar neighbors need to be realistic

March 9, 2010

A company should always be a good neighbor, but don’t the neighbors also have to be good neighbors?

Instead of being happy that Navistar is going to bring its world headquarters, and approximately 7,000 jobs, to the former Lucent property on Warrenville Road, surrounding residents seem almost universally opposed to the idea. I guess the recession isn’t as bad as I thought.

What upsets the residents is apparently the idea that Navistar, a company that specializes in advanced diesel engines, was going to be testing, well, diesel engines. As someone who sincerely wishes that mankind would never burn another ounce of fossil fuel, I have a certain sympathy for that position.

But I also have sympathy for the idea that companies have to continually develop products in order to pay their employees and be successful.

Navistar is apparently making great strides in reducing emissions with new in-cylinder technology. Personally, I wish every engine manufacturer was working as hard as Cyrus McCormick’s old company to meet and exceed environmental emission standards without requiring cumbersome and expensive engine add-ons.

There is a reason why we have laws regulating air pollution and excessive noise. They protect the public while giving manufacturing companies valuable guidance about what they will be able to accomplish.

If the laws aren’t strict enough, we should change them, but if they do, in fact, adequately protect the public then, as long as companies stay well within the law, they should be allowed to do whatever they need to do to be competitive.

Frankly, the idea that manufacturing must be hospital-room clean and produce absolutely no emissions is unrealistic. Nobody who uses electricity from coal-fired plants, who uses a gas-powered lawn mower, or who starts his charcoal with lighter fluid has the right to say that.

And the notion that autistic kids would be harmed by exhaust fumes more than other kids is offensive. That’s an attempt to use our sympathy for developmentally challenged children unfairly.

While I think it’s wonderful that Navistar has tried to accommodate its opponents’ objections, I just hope it doesn’t compromise its business. It makes no sense to restrict the number of test cells when, an equal distance away, is an expressway pumping out a thousand times more air pollution than Navistar ever could, especially when you consider how clean its new engines are.

While I don’t want to offend anyone more than I usually do, I have to ask when Americans became such delicate hot house flowers. We are the world’s greatest polluters but yet are so preoccupied with hypothetical, usually nonexistent, dangers like minuscule amounts of radiation that we tie the hands of our most productive citizens.

That’s nuts.

Contact Bill Mego at bill.mego@sbcglobal.net.

 

Chicago Tribune:  Navistar CEO navigates recession, move to Lisle

Greg Burns

March 8, 2010

Times sure seem tough in the trucking business. Along with the usual cutthroat pricing and strict new emission standards, the neighbors have gone on the warpath too.

It’s been that kind of year for Daniel Ustian, chief executive of Navistar International Corp., whose strategy for negotiating the recession paid off, even as his plan to move three miles down the street triggered a public brawl.

Warrenville-based Navistar has made it through the worst downturn in memory without losing a dime, no easy feat in a business so cyclical its sales charts look like roller-coaster tracks.

The financial success hasn’t shielded it from angry locals denouncing its alleged affinity for “corporate welfare” and diesel exhaust. It’s not every day a company with roots dating to 1831 finds itself pitted against a neighborhood school for autistic children.

Navistar’s newly revised proposal for moving to the former Alcatel-Lucentsite off Interstate Highway 88 is heading for a showdown next month before the village board of trustees in Lisle, coinciding with some bold moves in the marketplace.

Ustian pushed hard into government contracting a couple of years ago, and his company now produces dozens of military vehicles.

“We had nothing before that,” he explained in an interview.

Government orders, especially for heavily armored vehicles known as MRAPs, kept Navistar in the black last year despite its huge legacy costs, burdensome debt and the worst commercial truck market since the 1950s.

Those military revenues have peaked after a couple of losing battles for additional contracts, and the company could post much lower results in that sector when it reports earnings on Monday.

But Ustian remains confident in his staying power, forecasting 2010 military sales of at least $2 billion, plus $500 million from related parts. “We’ll be closer to $3 billion,” he predicted.

Ustian has even more riding on his risky strategy for meeting new emissions standards. Navistar is banking on a less-costly technology than other major competitors such as Volvo Group and Paccar Inc. The approach gives up some fuel efficiency, but it’s easier for customers and provides more wiggle room for cutting sticker prices as the market recovers late in the year, he said.

Ustian also may be close to a significant realignment of his financing subsidiary, retaining the larger part that handles dealers while selling the customer-finance arm to GE Capital or another rival with lower capital costs. “There will be something,” he said Friday.

Even after that potential spinoff, Navistar expects to grow dramatically once the economy starts to recover and the battered industrial sector regains its footing.

“Our country has a great opportunity to add manufacturing jobs,” Ustian said. “We want to double the size of our company.”

At its peak, under the old International Harvester moniker, Navistar employed 100,000. With 15,100 active employees as of October, it’s not what it used to be. But some industry analysts say it could expand in a hurry.

Walter Liptak, senior vice president at Barrington Research in Chicago, sees potential. “Navistar is poised for a big comeback.”

If Ustian has his way, he will oversee the revival from the sprawling glass-covered complex standing virtually empty in Lisle.

Navistar is prepared to spend $100 million-plus on renovations, building a state-of-the-art research and development center for testing new trucks and engines. About 3,000 jobs would move, including 1,500 from outside the area, the company says.

But community activists who have banded together to stop Navistar believe almost nothing the company has said so far. They’re concerned about everything from pollution levels to an unfair financial burden if the development obtains tax increment financing. A scaled-down plan the company unveiled last week makes no difference, given the prospect of future expansion, activists say.

If Navistar were moving only white-collar corporate jobs without any tax incentives, no problem, said MaryLynn Zajdel of the Citizens for Healthy Development. Otherwise, she said, “It doesn’t belong. Not here. It belongs in a place where it can be mitigated.”

Navistar has been unwilling, she added, “to make this a dialogue.”

But Ustian is confident the revisions unveiled last week, including a much-smaller R&D center farther from the school, will address most local concerns. If government officials approve, Navistar could close on the property at the end of the summer and move in stages beginning in early 2011.

gburns@tribune.com

Copyright © 2010, Chicago Tribune

 

Naperville Sun: Navistar seeks to placate its opponents

March 7, 2010

By HANK BECKMAN For Sun-Times Media

With Navistar presenting its revised proposal to develop the former Lucent property at 2600 Warrenville Road to Lisle officials Thursday, opponents of the planned development are cautiously optimistic.

The new Environmental Impact Study indicates that Navistar’s proposal to bring its world headquarters to Lisle has addressed at least some of the concerns that prompted widespread protests from area residents.

The Navistar headquarters in Warrenville has submitted a zoning petition to renovate and redevelop this former Lucent Technologies campus in Lisle for a new international headquarters.
(James C. Svehla/Staff photographer)

“It sits within the Office/Research zoning,” Navistar spokesperson Jillane Kleinschmidt said when reached by telephone.

Kleinschmidt was referring to the controversy over testing diesel engines in the proposed technology center originally located in the northeast quadrant of the property. Opponents of the plan maintain the testing sought in the original proposal — including the testing of diesel engines — went beyond the light testing allowed in an O/R zone.

Navistar’s new proposal calls for a Lisle Technology Center, formerly proposed as an Advanced Technology Center, to be housed in a 230,000-square-foot structure, as opposed to the original 335,000-square-foot building.

The LTC will now be in the northwest corner of the 88-acre development, which puts it about 1,609 feet from Giant Steps Illinois, a school for autistic children, and 963 feet from residential properties east of the proposed Navistar site. Previously, the location of the ATC would have been 632 feet from Giant Steps and 325 feet from residential properties (all distances approximate and according to Navistar calculations).

The proximity of the ATC to homeowners and Giant Steps, with the possibility of noise pollution and excessive exhaust from diesel testing, had been a major sticking point with Navistar’s potential neighbors. While many residents were concerned with the possibility of the effects of diesel exhaust, Giant Steps had been particularly adamant about the dangers to autistic children from increased noise and toxic emissions. The EIS made specific reference to the fact that Giant Steps is 1,671 feet from Interstate 88.

The testing of engines is now being proposed to be conducted on a part-time basis during regular business hours. Instead of 62 testing cells, only six will be operational, and one-third of the testing will be devoted to hybrid technology. No durability testing will take place, which means no running of engines for long periods.

Instead of the 20,000 gallons of diesel fuel burned every week in the original proposal, less testing means only 750 gallons will be burned per week, with supplies only having to be replenished every eight weeks.

Moreover, instead of storing up to 160,000 gallons of fuel in above-ground storage, the new proposal calls for only 2,000 gallons of storage below ground.

Objections to other aspects of the deal, particularly potential tax increment financing and the sale of forest preserve land to Navistar, remain to be addressed.

Lisle Mayor Joe Broda said the new proposal contained “a lot of data to be analyzed” and didn’t think the proposal would come back to the Planning and Zoning Commission before April. But he did express hope that the controversy would be resolved. “It appears that Navistar has taken the concerns of the community very seriously,” Broda said by telephone. “It’s a step in the right direction.”

Representatives from Giant Steps were unavailable for comment. Other residents took a wait-and-see attitude.

“It’s clearly a better design than before,” Richard Wilkie, a resident in the forefront of the opposition, said when reached by telephone. But he pointed out that even if the LTC is being reduced in size, other buildings that were scheduled to be eliminated are now remaining. “What functions are going to be put in there?” he asked. He wants to know definitively that Navistar is “not going to add these functions (diesel testing) at a later date.”

Based on what he called the company’s lack of transparency about the development, Wilkie wants to see the wording of the proposal before he gives it his seal of approval. “We have to go through the process,” he said.

 

Naperville Sun: Navistar lays out plans for Lisle site

March 6, 2010

From Submitted Reports

Navistar presented its revised proposal to develop the former Alcatel-Lucent campus at 2600 Warrenville Road to Lisle officials Thursday.

Not all the documents have been released as of this writing; the long-awaited environmental impact study is yet to be seen.

But early reports would indicate that Navistar has addressed at least some of the concerns that prompted protests from both residents living in the immediate area and Giant Steps, Illinois, an autistic school and training center located 120 feet from the proposed site.

“It sits within the Office/Research zoning,” Navistar spokesperson Jillane Kleinschmidt said when reached by telephone.

Kleinschmidt was referring to the controversy over testing diesel engines in the proposed technology center located in the Northwest quadrant of the property. Opponents of the plan maintain the testing sought in the original proposal went beyond the light testing allowed in an O/R zone.

Navistar’s new proposal calls for testing to be conducted part-time during regular business hours and focus on hybrid technology at least one-third of the time.

Instead of the 20,000 gallons of diesel fuel burned per week in the original proposal, the new plan calls for only 750 gallons to be burned, with supplies only having to be replenished every eight weeks.

Moreover, instead of storing up to 160,000 gallons of fuel in above-ground storage, the new proposal calls for only 12,000 gallons of storage below ground.

 

ABC 7:  Navistar hopes to set up HQ in Lisle

Thursday, March 04, 2010

John Garcia

March 4, 2010 (LISLE, Ill.) (WLS) — A company that tests diesel engines is hoping to set up new headquarters in the southwest suburbs bringing with it thousands of new jobs.

Top officials with Navistar formally introduced plans Thursday afternoon to open its headquarters in Lisle. But not everyone is in support of the proposal.

More than half of the school buses on the road in United States are made by Navistar. They also make trucks and RVs.

The building looks like something out of Star Trek. The futuristic looking facility has been empty since Lucent Technologies vacated it. Navistar’s current headquarters is in Warrenville, about three miles west of Lisle. But the company is proposing to take over the Lucent building for the bargain price of $34 million.

“We’ve been told it’s one of the biggest projects that the state of Illinois has had in many, many years. And when you think of the kind of job that’s in there, these are high-tech positions in most cases, it’s pretty attractive we think for this area,” said Dan Ustian, Navistar CEO.

The move would bring about 1,500 additional jobs to the building. Navistar says the total of 7,000 jobs in all will be preserved or added in the area if the plan is approved by village, county and state officials. According to the company, most of those jobs would be high-paying research and office work positions.

“There’s obviously impact from a tax base but certainly having that many, having several thousand people located to this new campus, there’s impacts to the hotels, to the restaurants, to the local stores. There’s an awful lot of opportunity for the village of Lisle and the surrounding communities,” said Donald Sharp, Navistar VP.

Initial plans for the site called for an engine testing facility just 600 feet from Giant Steps, a school for autistic children. That plan would have had them storing thousands of gallons of diesel fuel on site. Several neighbors protested. The new plan, however, moves the testing facility to the other side of the property. And dramatically reduces the testing and fuel storage. School officials have yet to see the new proposal.

“If they have dramatically revised the plan, like I said, nothing could be more beneficial to us than to have them next door,” said Bridget O’Connor, Giant Steps School.

The village of Lisle is expected to hold planning and zoning commission hearings on this plan sometime perhaps early next month. If approved, Navistar also plans about $100 million worth of construction to cater the building to their specific needs.
(Copyright ©2010 WLS-TV/DT. All Rights Reserved.)

 

Chicago Tribune: Navistar scales back plans for Lisle headquarters

March 4, 2010 7:08 PM |

Navistar International Corp. today unveiled a revised proposal for a new corporate headquarters in west suburban Lisle that sharply scales back a diesel engine and truck testing facility included in a controversial earlier plan.

Officials at a nearby school for autistic children and other neighbors have opposed the development in part because of worries about air pollution, noise, traffic and safety issues related to research and development at the former Alcatel-Lucent site, 2600 Warrenville Rd. Navistar, now based about three miles away in Warrenville, has maintained those fears are unfounded.

The truck and engine maker’s new blueprint places the R&D facility about 1,000 feet farther from the school than the original plan did. It also would reduce the facility’s size by about a third and cut diesel-fuel storage capacity by more than tenfold. A Navistar R&D center in Melrose Park would remain in its present location under the new plan rather than move, the company said.

Navistar’s latest proposal sets the stage for a showdown before the Lisle village board of trustees expected sometime in April. The alterations won’t appease determined opponents, said Lisle business owner Brian McClure, who belongs to group objecting to the Navistar plan.

“It doesn’t matter that they’ve scaled it back,” he said. “It will still affect people for hundreds of miles around.”

Navistar intends to seek a tax-increment finance district based on its plan to invest more than $100 million in the project. It wants to move roughly 3,000 workers into the now-vacant corporate campus, 1,500 of whom will be new to the area, said Navistar Chief Executive Dan Ustian.

“With this plan we’ll achieve our twin goals of creating jobs while being a good neighbor for our community,” Ustian said.

Granting a TIF for the project would be “unfair” to the “small taxpayer,” McClure contends. “People are outraged in this town.”

Ustian said critics have mischaracterized Navistar. “It’s a misrepresentation of what we are,” he said in an interview. Based on the potential economic benefits to the community, he said, “This should have been a no-brainer.”

Greg Burns

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