Navistar, Tulsa In Spat Over Bus Plant
06 May 2020
In a surprisingly bitter war of words, Navistar and the city of Tulsa, Okla., are fighting over what Navistar said is the city’s threat to evict IC Bus from its school bus manufacturing facility at the Tulsa International Airport, a move that Navistar said would cost the city and the state of Oklahoma 1600 jobs.
The city denies it is trying to push the Navistar affiliate out and said it will continue to negotiate with the company.
In a press release issued Tuesday night, IC Bus executives said that in January, the city, at the direction of Mayor G.T. Bynum, told IC Bus it was going to terminate the company’s lease effective Feb. 14. The eviction comes 20 years into the company’s 40-year lease. The company said it is at an impasse with the city regarding the lease of the 1 million sq.ft. plant and said it is concerned that if there is no resolution, it will be forced to relocate outside of Oklahoma.
“Over the past 20 years, we’ve been able to create 1600 good-paying manufacturing jobs,” said Phil Christman, president of operations for Navistar International Corp., the parent company of IC Bus. “We spend $750 million each year with vendors and suppliers, and support more than 100 local businesses. We do not understand why city officials suddenly want to break the long-term framework and threaten to evict us.”
“We would like to get this matter resolved so we can stay in Tulsa. We have a great workforce and, despite the current tough economic conditions, we are continuing to operate and we have plans for growth. The potential loss of 1600 jobs in the current economic environment makes no sense.”
According to Navistar, in addition to threatening to terminate the lease and evict IC Bus, Bynum, chief of economic development Kian Kamas and Mark Hogan, the city’s director of asset management, have demanded that the company spend approximately $20 million on projects by 2024, regardless of the company’s maintenance schedule. The mayor and his team have also demanded a massive rent increase of $28 million over the next 10 years, the company said.
In 1999, IC Bus and the city entered into an agreement for a 40-year lease to repurpose an abandoned bomber plant on Mingo Road adjacent to the airport and transform it into a modern manufacturing facility. The nearly mile-long plant is the major producer of school buses, and IC Bus said it has invested over $140 million in the plant since it opened, including more than $48 million over the past five years.
According to IC, the city’s demands include:
-Replacing dormant freight elevators that are not used by IC Bus with new elevators that will not be used for the foreseeable future by the plant.
-Requiring a complete repaving and resurfacing of driveways, access roads and parking lots instead of maintenance and patch repair.
-Immediately replacing more than 1000 light fixtures in the parking lots, office areas and on the manufacturing floor with LED light bulbs, despite the fact that the plant retrofit and installed high efficiency lighting several years ago and the fixtures are less than halfway through their expected lifecycle.
-Accelerating beautification and improvements such as carpet and ceiling tile replacement, painting and numerous items related to the look of the building’s exterior.
“Our priority is to ensure the plant is safe and efficient so that it can weather this economic climate, while providing communities with the world’s safest, most technologically advanced school buses ever made,” said Christman. “The city’s demands to divert capital away from our employees and manufacturing operations, to meet beautification and other superficial goals made up by city staff, is not appropriate, and it is certainly not worth risking 1600 jobs. We hope that the support of the community will help forge a consensus allowing us to stay in Tulsa, rather than IC Bus being forced to make long-term plans in another city out of state that will honor its commitments and contracts.”
So far, the impasse has not disrupted any manufacturing operations, and company officials are confident that this dispute will not cause manufacturing delays for the foreseeable future. A standstill agreement with the city expires on May 29, and IC Bus said it hopes to reach a reasonable resolution with the city before that date.
According to a report by Tulsa ABC affiliate TV station KTUL, Bynum said the city has no intent of evicting IC Bus and is working to sign a new lease.
“A public relations campaign launched today grossly mischaracterizes these negotiations in an obvious attempt to politicize them,” Bynum said. “My response: The citizens of Tulsa will not be played for suckers. I remain confident we can identify common ground to secure jobs and properly maintain this facility. We’ve done so with great success during my time as mayor with other tenants, and I see no reason why this case would be any different because, currently, it pays a total lease price of $1 and the only thing they have to do is keep the tax payer-owned facility safe.”
The company and city have agreed to keep the conversation going and extend negotiations through May 29 at the very least.