Navistar Suffers June Jitters

June 28, 2012

June has been a busy month for Navistar.

June has been a busy month for Navistar.

To recap, a federal court tossed out the U.S. EPA ruling allowing Navistar to sell noncompliant engines. Then reports surfaced of suitors—welcome or not—anxious to purchase the engine and truck manufacturer, most notably VW. In addition, two serious investors with holdings of more than 10 percent came to light, which was followed by the Navistar board instituting a poison pill plan.

The most scathing item I’ve seen came out of this week, written by contributor Paul Roderick Gregory. Gregory takes to task Navistar and the U.S. EPA for their handling of the engine credits and fines.

There was also a blog that presented a detail analysis of Navistar’s warranty costs affiliated with its engines.

Navistar is not without some support, however. Neighbor Crain’s Chicago Business (Navistar is headquartered in a Chicago suburb), posted a blog complimenting the engine maker for pushing a different engine technology than other engine makers (SCR v. EGR). He hypothesizes that Navistar has a Plan B, and if it doesn’t it sure should have.

Navistar does not have an EPA-compliant engine, although its MaxxForce 13-liter has been submitted for certification. This calls into question how truck builders using Navistar engines will proceed. Navistar’s factory in Springfield, Ohio, is “business as usual” it appears. But not without some trepidation.

Caterpillar’s CT660 construction truck uses engines that incorporate “advanced exhaust gas recirculation” and do not require urea, both of which are Navistar features. Caterpillar hasn’t responded to us about how or if the ruling affects plans for marketing their truck line.

June isn’t ending with much clarity for Navistar. July will mark the end of its third quarter, so we can look forward to another month of news and financial analysis from various sectors. In the meantime, we’ll try to keep tabs on developments.

About the Author

Rod Sutton

I have served as the editorial lead of Construction Equipment magazine and since 2001. 

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