Navistar International Corp. announced late Sunday that members of the United Auto Workers have agreed to a five-year labor agreement with its International Truck and Engine Corp. subsidiary.

"We're happy we've got a contract," Navistar spokesman Roy Wiley said. "We're happy it's for five years and now we'll move forward."

Navistar said the new contract will provide overtime flexibility, shared health care costs, a competitive new-hire package and reduced costs associated with layoffs.

The new agreement will also give employees bonuses of 3% of their earnings in the first, second and fourth years of the contract, to be paid in a lump sum each of those years. In addition, the base wage rate of $17.05 an hour for current employees will be increased by 3% in the third and fifth years of the contract.

The contract also contains an increase in pension benefits for employees with more than 28 years of service who opt to retire after January 1, 2004.

"The resultant agreement addresses the needs of our employees and provides our business with a competitive labor package that will help the company be profitable over the business cycle," said Navistar president & CEO Dan C. Ustian.