International Truck and Engine Corp. and the Canadian Auto Workers (CAW) reached a conditional agreement Friday that could avert the planned closure of the company's Chatham, Ontario, heavy-duty truck assembly plant.

The plant will remain open if both sides can agree on how to cut $28 million in costs from plant operations, which International said was needed to make the facility competitive.

"They (CAW) presented us with a plan that would help make the plant cost-competitive," International spokesman Roy Wiley told Reuters.

The Chatham plant employs about 900 active CAW members and produces an average of 35 trucks a day. The plant has laid off about 1,300 union employees. At its peak in 1999, the plant produced an average of 120 trucks a day.

International announced in March that it would close the plant July 18. Production of International 9000i Series Class 8 trucks would then be switched from Chatham to the company's Escobedo, Mexico assembly plant.

The plant was the target of a six-week strike last year by members of the CAW. Union workers returned to work after the company agreed not to cease production at the plant for at least one year.