“Market Cap $2.95 B As of May 2013
At a Glance
- Industry: Heavy Equipment
- Founded: 1902
- Country: United States
- CEO: Lewis Campbell
- Website: www.navistar.com
- Employees: 18,500
- Sales: $12.53 B
- Headquarters: Lisle, Illinois
#1838 Global 2000
- #768 in Sales
- #1894 in Assets
Navistar International Corporation (NIC) is a holding company, whose principal operating subsidiaries are Navistar, Inc. and Navistar Financial Corporation (NFC). The Company is a manufacturer of International brand commercial and military trucks, IC Bus (IC) brand buses, MaxxForce brand diesel engines, Workhorse Custom Chassis (WCC) brand chassis for motor homes and step vans, and Monaco RV (Monaco) recreational vehicles (RV), as well as a provider of service parts for all makes of trucks and trailers. In addition, it is a private-label designer and manufacturer of diesel engines for the pickup truck, van and sport utility vehicle (SUV) markets. It also provides retail, wholesale, and lease financing of trucks and parts. NIC operates in four segments: Truck, Engine, Parts and Financial Services. In February 2013, Mahindra And Mahindra Ltd purchased the Navistar Group’s stake in Mahindra Navistar Automotives Ltd (MNAL) and Mahindra Navistar Engines Pvt Ltd (MNEPL).”
“Navistar International History
The merger of McCormick Harvesting Machine Company and the Deering Harvester Company in 1902 resulted in the formation of the International Harvester Company (IH) ofChicago, Illinois, which over the next three-quarters of a century evolved to become a diversified manufacturer of farming equipment, construction equipment, gas turbines, trucks, buses, and related components. During World War II, International Harvester produced the M-series of military trucks that served the Marine Corps and the U.S. Navy as weapons carriers, cargo transporters and light artillery movement. Today, Navistar produces International brand military vehicles through its affiliate Navistar Defense.
1986-1991: Transition from agricultural roots
International Harvester fell on hard times during the poor agricultural economy in the early to mid-1980s and the effects of a long strike with the UAW over proposed work rule changes. IH’s new CEO, Donald Lennox, directed the management organization to begin exiting many of its IH’s historical business sectors in an effort to survive. Some of the sales of profitable business endeavors were executed to raise cash for short-term survival, while other divisions were sold due to lack of immediate profitability. During this period of questionable economic survival, in an effort to raise needed cash and to reduce losses, the management team lead by Mr. Lennox at IH shed many of its operating divisions: Construction Equipment Division to Dresser Industries; Solar (gas turbines) Division to Caterpillar; Cub Cadet (lawn and garden equipment) to MTD Products and, lastly, the Agricultural Division to Tenneco, which merged it with their J.I. Case subsidiary. The Scout and Light Truck Parts Business was sold to Scout/Light Line Distributors, Inc. in 1991.
After the Agricultural Division sale in 1985, all that remained of IH was the Truck and Engine Divisions. The company changed its name in 1986 to Navistar International Corporation. (The International Harvester name and IH logo were assets of the Agricultural Division and consequently were part of the sale to Tenneco; the IH name and logo are still in use, having been incorporated into the Case IH brand name). In the early 1980s, IH developed a series of reliable large-displacement V8 diesel engines that were sold as an option for heavy-duty Ford 3/4-ton and 1-ton pickup trucks.
Navistar still uses the “International” brand in its diesel engine and truck product lines, and the brand name continues on in product lines of Navistar International’s International Truck and Engine Corporation subsidiary.
1990s-early 2000s: Rediversification
During the 1980s and 1990s, the popularity of diesel engines had made Navistar a leading manufacturer of bus chassis, particularly school buses. The company purchased one-third of American Transportation Corporation (AmTran), an Arkansas-based manufacturer in 1991, and the remaining two-thirds in April 1995. By becoming both a body and chassis manufacturer at the same time, Navistar gained significant market share in the industry. In 2002, AmTran was rebranded as IC (Integrated Coach) after a few months as International Truck and Bus.
After nearly a century of business in Chicago, Navistar announced its plans on 30 September 2000 to leave the city and relocate its corporate offices to west suburbanWarrenville, Illinois. The company’s Melrose Park, Illinois plant is notable for a significant workplace shooting on February 5, 2001.
In 2004, Navistar re-entered the retail vehicle market for the first time since 1980. The International XT (Extreme Truck) pickup truck was a series of three pickup trucks. It was (by far) the largest pickup truck available for retail sale and two of the three versions (the CXT and RXT) were essentially International Durastar medium-duty trucks fitted with pickup beds. The third version (the MXT) was essentially a street-legal version of a Navistar-designed military vehicle. The three XT trucks were sold until 2008.
In 2005, Navistar purchased the Workhorse company (started in 1998 by investors who took over production and sales of General Motors’ popular P-series Stepvan chassis when GM dropped it), a manufacturer of step-van and motor home chassis, to seemingly re-enter the delivery van market. It appeared that the new subsidiary might also benefit by its association with a company whose history from the 1930s into the ’60s included the popular Metro van. For a short time Workhorse offered an integrated chassis-body product called MetroStar. In Sept. of 2012, Navistar announced the shut down of Workhorse and the closure of the plant in Union City, IN in order to cut costs.
In January 2006, the company declared it would not file its form 10-K annual report with the U.S. Securities and Exchange Commission on time. The delay was caused by the disagreement with its auditors, Deloitte and Touche, over complex accounting issues. In April, Navistar fired Deloitte, its independent auditor for 98 years, and hired KPMG to help restate earnings back to 2002 to fix accounting errors. On December 15, 2006, Navistar executives announced further delay of its restatement and 2006 results. The announcement prompted the New York Stock Exchange (NYSE) to announce the delisting of the company, after 98 years of trading, although the NYSE subsequently delayed the delisting pending an appeal by Navistar. However, Navistar was removed from the S&P 500 Index, and the NYSE eventually denied Navistar’s appeal and delisted the stock; it traded on the Pink Sheets until 30 June 2008, when it was relisted on the NYSE, under its previous ticker symbol, NAV, after catching up with its filings. Christopher Anderson, the Deloitte partner responsible for the 2003 audit, accepted a one-year suspension from public audits in 2008, and became the first individual to be fined by the PCAOB. Chief Executive Officer Daniel Ustian agreed to surrender to Navistar shares worth $1.3 million, while former Chief Financial Officer Robert C. Lannert consented to repay $1.05 million, each sum reflecting monetary bonuses they had received during the restatement period, the SEC said. Four other company executives paid civil penalties without admitting liability.
In 2007, Navistar’s International Truck and Engine Corporation became the first company to enter hybrid commercial truck production, with the International DuraStar Hybrid diesel-electric truck.
Navistar is the prime supplier of MRAP armored vehicles to the US military. The Navistar 7000 series has been fielded by the Canadian Forces for domestic operations. In 2005, the U.S. Army ordered 2,900 7000-MVs for the Afghan National Army and Iraqi Ministry of Defense and an additional order of 7,000 was added in 2008.
2012 and non-compliant engines
“In 2012, the U.S. Court of Appeals in Washington voided an interim rule by the Environmental Protection Agency that had allowed Navistar to sell non-compliant engines provided it paid a fine. The court found that the U.S. agency had violated the Administrative Procedures Act in issuing the rule because it provided no formal notice or opportunity for comment.”
“After the new emissions standards went into effect, Navistar was able to sell its noncompliant engines by relying on pollution credits it had banked previously. With those credits running out, however, Navistar faced the prospect that it would not be able to sell the engines in the U.S. The EPA rule that was struck down had allowed Navistar to sell its model year 2012 and 2013 engines while paying a fine of $1,919 on each engine. Competitors complained that the fines were far too low. The agency adopted the rule without following normal procedures that allow for public comment on proposed rules.”
“The court said in its decision that Navistar’s business plight was not a proper justification for the EPA to issue the rule without following normal administrative procedures. ‘The rule does not stave off any imminent threat to the environment or safety or national security,’ Judge Janice Rogers Brown wrote for the court. ‘It does not remedy any real emergency at all, save the ’emergency’ facing Navistar’s bottom line.”
Navistar has since then begun providing redesigned engines that comply with environmental protections in 2013, using the widely adopted SCR technology.”
*Information from Forbes.com and Wikipedia.org
**Video published on YouTube by “Internationaltruck“